Question

n your opinion, which countries have relatively high demand for money for motive transactions,
(1) countries with an even distribution of income, or
(2) countries with relatively high income inequality. Provide an explanation of your choice

Answer 1

Generally countries with even distribution of income have high savings rate. So no. of transactions are less as money demand is less. Also with high savings most of the money is saved. So desire to hold money for carrying out day to day transactions is relatively less.

Further countries with high income inequality often witness high MPC ( marginal propensity to consume) so money demand is high to carry out number of transactions for daily requirements. Therefore such countries usually have high demand for money for motive transactions.  

However in my opinion only a detailed data analysis of cross countries can help find out exact consequences of inequality on motive transactions.