When a person puts a $20 bill in the glove compartment of their car in case of an emergency, this is an example of?

Question

Ashly Harmon

Social Studies

6 November, 08:33

When a person puts a $20 bill in the glove compartment of their car in case of an emergency, this is an example of?

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Haylie Bird · Answer 1

This is an example of the precautionary demand for money.

Precaution means that you prepare yourself in advance for something 'bad' that may happen in the future. If you put a $20 bill in the glove compartment of your car, it means that you are saving that extra cash in case you need it for an emergency, to make sure you are covered.