The transaction demand for money is very closely associated with money’s use as a:

Question

store of value

unit of account

medium of exchange

standard of deferred payment

Answer 1

The transaction demand for money is very closely associated with money’s use as a medium of exchange.

This is because transaction demand refers to the amount of money people hold to make everyday purchases and transactions, which directly relates to the role of money that facilitates the buying and selling of goods and services.