Multiple Choice
Which of the following is correct?
A) The asset demand for money is downward sloping because the opportunity cost of holding money declines as the interest rate rises.
B) The asset demand for money is downward sloping because the opportunity cost of holding money increases as the interest rate rises.
C) The transactions demand for money is downward sloping because the opportunity cost of holding money varies inversely with the interest rate.
D) The asset demand for money is downward sloping because bond prices and the interest rate are directly related.
Correct Answer:
Verified
Correct Answer:
Verified
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