Which basic principle of economics best explains why the demand for money is negatively related to the nominal interest rate?

Question

Quizplus · Accepted Answer

The principle of opportunity cost states that individuals will choose the option that provides the greatest benefit at the lowest cost. When nominal interest rates are high, the opportunity cost of holding money is also high, as individuals can earn more by investing their money. Therefore, the demand for money decreases as the nominal interest rate increases.

Which Basic Principle of Economics Best Explains Why the Demand