When the price level increases and people want to hold more money, interest rates decrease.

Name: When the price level increases and people want to hold more money, interest rates decrease.
Brand: Quizplus
Rating: 4.9 (35 reviews)

Question

Quizplus · Accepted Answer

When the price level increases and people want to hold more money, there is an excess demand for money. This leads to an increase in interest rates, as people are willing to pay more to borrow money to meet their increased demand for it.

When the Price Level Increases and People Want to Hold