Suppose the Typical Household Holds $1,000 When the Interest Rate

Multiple Choice

Suppose the typical household holds $1,000 when the interest rate is 5 percent. When the interest rate rises to 6 percent, the typical household would most likely hold

A) more money because the opportunity cost of holding money is lower.
B) less money because the opportunity cost of holding money is lower.
C) more money because the opportunity cost of holding money is higher.
D) less money because the opportunity cost of holding money is higher.