Speculative demand for money is a(n):
A)positive function of prices.
B)inverse function of prices.
C)positive function of interest rates.
D)inverse function of interest rates.
E)function of unexpected needs.

Question

Quizplus · Accepted Answer

Speculative demand for money is inversely related to interest rates because as interest rates rise, the opportunity cost of holding money increases, leading individuals to prefer investing in interest-bearing assets rather than holding onto cash.

Speculative Demand for Money Is A(n)