When the market for money is drawn with the value of money on the vertical axis and the quantity of money on the horizontal axis, the money demand curve slopes
A)upward, because at higher prices people want to hold more money.
B)downward, because at higher prices people want to hold more money.
C)downward, because at higher price people want to hold less money.
D)upward, because at higher prices people want to hold less money.

Question

Quizplus · Accepted Answer

The money demand curve slopes downward because at higher prices (or lower value of money), people need or want to hold more money to purchase goods and services, reflecting an inverse relationship between the value of money and the quantity demanded.

When the Market for Money Is Drawn with the Value