Question

What does the speculation motive refer to? (more in-depth)

A) The desire to speculate on future changes in the money supply
B) The need to hold money for short-term investment gains
C) The willingness to trade money for other assets
D) The desire to profit from future changes in asset prices

Answer 1

The speculation motive refers to the desire to profit from future changes in asset prices. It involves making speculative investments based on predictions of market fluctuations.

Step-by-step explanation:

The speculation motive refers to the desire to profit from future changes in asset prices. Speculation is the practice of investing in risky financial opportunities in the hopes of a fast payout due to market fluctuations. In the context of the speculation motive, individuals hold money with the intention of using it to make speculative investments in assets such as stocks, bonds, or real estate. These individuals are motivated by the belief that they can accurately predict future changes in asset prices and make profitable trades.