Why do individuals hold money when it does not provide the services that, say, a house does?
A)Money is the most liquid asset.
B)Money is the only form in which wealth may be held.
C)Money increases in value faster than other assets.
D)Money is useful in avoiding taxes on certain transactions.

Question

Quizplus · Accepted Answer

Money is the most liquid asset, meaning it can easily be exchanged for goods or services when needed. It provides a medium of exchange, unit of account, and store of value, all of which make it a useful asset to hold. While other assets such as a house may provide services, they are not as easily exchangeable for other goods and therefore not as liquid as money.

Why Do Individuals Hold Money When It Does Not Provide