An increase in ________ decreases the quantity of money people want to hold.
A) the price level
B) real GDP
C) the interest rate
D) the quantity of money

Question

Quizplus · Accepted Answer

An increase in the interest rate decreases the quantity of money people want to hold because higher interest rates make holding money (which earns little or no interest) less attractive compared to holding other assets that earn higher returns.

An Increase in ________ Decreases the Quantity of Money People