A major difference between the transactions demand for money and the p

A major difference between the transactions demand for money and the precautionary demand is that the

A) transactions demand is for emergencies while the precautionary demand is for every day expenditures.
B) transactions demand involves expected expenditures while the precautionary demand involves unexpected expenditures.
C) transactions demand means that people are foregoing interest but they are not foregoing interest in the precautionary demand.
D) transactions demand leads to the purchase of assets while the precautionary demand does not.

ANSWER

B