In the market for money,a lower level of income causes the demand for money to ________ and the interest rate to ________,everything else held constant.

Question

Quizplus · Accepted Answer

A lower level of income reduces the amount of money people want to hold for transactions, leading to a decrease in the demand for money. With lower demand for money, the interest rate also decreases, as there is less competition for borrowing funds.

In the Market for Money,a Lower Level of Income Causes