Holding everything else constant in the market for money,as the interest rate rises,the opportunity cost of holding money ________ thus making money less desirable. So the quantity of money demanded falls.
A)increases
B)decreases
C)remains the same
D)fluctuates

Question

Quizplus · Accepted Answer

When the interest rate rises, the opportunity cost of holding money (instead of investing it or saving it in an interest-bearing account) increases. This makes holding money less attractive, leading to a decrease in the quantity of money demanded.

Holding Everything Else Constant in the Market for Money,as the Interest