If the interest rate falls, people will want to hold more bonds, meaning the demand for money shifts to the left.

Name: If the interest rate falls, people will want to hold more bonds, meaning the demand for money shifts to the left.
Brand: Quizplus
Rating: 4.7 (51 reviews)

Question

Quizplus · Accepted Answer

When the interest rate falls, people will generally prefer to hold more money rather than bonds because the return on bonds decreases. This increases the demand for money, shifting the demand curve to the right, not to the left.

If the Interest Rate Falls, People Will Want to Hold