Demand for Money

Definition

The demand for money refers to the desire of individuals and businesses to hold cash or liquid assets for transactions and precautionary purposes.

Related terms

Money Supply: The total amount of money available in an economy at a given time.

Liquidity Preference: The preference of individuals to hold their wealth in liquid form (cash) rather than in other assets.

Transaction Demand: The demand for money to facilitate daily transactions such as buying goods and services.