Transactions motive related to Y Since money is a medium of exchange it can be used to carry out everyday transactions. Keynes believed that these transactions were proportional to income. Precautionary motive related to Y People hold money as a cushion against an unexpected need. This motive is determined primarily by the level of transactions that they expect to make in the future and that these transactions are proportional to income. Speculative motive Since money is also a store of value, Keynes called this reason for holding money the speculative motive. Keynes divided the assets that can be used to store wealth into two categories: money (that pays no interest rate) and bonds (that pays positive interest rates). Money demand is negatively related to i