A change in financial technology that reduces the need to hold cash balances_{--------------------} the demand for money and _{--------------------} the equilibrium nominal interest rate. A)decreases; lowers B)decreases; raises C)increases; raises D)decreases; does not change E)increases; lowers

Question

Quizplus · Accepted Answer

A change in financial technology that reduces the need to hold cash balances decreases the demand for money, which in turn lowers the equilibrium nominal interest rate as there is less competition for available funds.

A Change in Financial Technology That Reduces the Need to Hold