Which of the following statements is true ?
A) The speculative demand for money at possible interest rates gives the demand for money curve its upward slope.
B) There is an inverse relationship between the quantity of money demanded and the interest rate.
C) According to the quantity theory of money, any change in the money supply will have no effect on the price level.
D) All of the above are true.

Question

Quizplus · Accepted Answer

The statement in option B is true as it reflects the inverse relationship between the quantity of money demanded and the interest rate. Option A is incorrect as it refers to the speculative motive for holding money, which only partially contributes to the upward slope of the demand for money curve. Option C is also incorrect as the quantity theory of money suggests that changes in the money supply can have a direct impact on the price level. Option D is not the correct answer as only option B is true.

Which of the Following Statements Is True