Solution
Option 1 -> People hold money primarily to carry out daily transactions for purchasing goods and services.
Option 2 -> This is a secondary motive where money is held to take advantage of future market opportunities and interest rate changes.
Option 3 -> This is not a motive but rather the overall concept that includes all reasons for holding money.
Option 4 -> This refers to the money available in the economy, not a reason for holding money.
Hence, Transaction motive -> The transaction motive is the principal motive for holding money as it represents the most fundamental need - conducting everyday purchases of goods and services. According to Keynesian economics, people need to hold cash for their routine transactions like buying food, paying bills, and other regular expenses. This is the primary and most essential reason why individuals and businesses hold liquid money, making it the principal motive among all motives for holding money (which also include precautionary and speculative motives). -> correct