If people increase their expected rate of interest,the speculative demand for money curve will _____ and money supply will _____.

Question

Quizplus · Accepted Answer

When people increase their expected rate of interest, the speculative demand for money decreases because they prefer to invest in bonds or other interest-bearing assets rather than holding money. This causes the speculative demand for money curve to shift downward. The money supply, determined by the central bank or monetary authority, remains unchanged by changes in the speculative demand for money.

If People Increase Their Expected Rate of Interest,the Speculative Demand