Transactions motive

Transactions motive

A desire to hold cash in order to conduct cash-based transactions.

Transactions Motive

The desire of an economic actor to maintain sufficient funds in a bank account in order to write checks on that account for daily needs and wants. A person with higher income has a greater transactions motive than a person with lower income; that is, that person wants to have more money in order to spend more. In Keynesian economics, the transactions motive is one of three reasons persons demand liquidity. See also: Liquidity preference, precautionary motive, speculative motive.