In regards to the Miller-Orr Model, The higher the interest rate, the lower the target cash balance.

Name: In regards to the Miller-Orr Model, The higher the interest rate, the lower the target cash balance.
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In the Miller-Orr model, the target cash balance is inversely related to the interest rate. As interest rates increase, the opportunity cost of holding excess cash in a non-interest-bearing account also increases, leading to a lower desired target cash balance.

In Regards to the Miller-Orr Model, the Higher the Interest