In October of 2015, the interest rate on money market accounts was about 0.2 percent. In 2007, the interest rate on money market accounts was about 4.0 percent. What has been the impact on money demand from this fall in the interest rate?
A) the money demand curve shifted to the right
B) the money demand curve shifted to the left
C) the quantity of money demanded increased
D) the quantity of money demanded decreased

Question

Quizplus · Accepted Answer

When interest rates fall, the opportunity cost of holding money decreases, leading to an increase in the quantity of money demanded.

In October of 2015, the Interest Rate on Money Market