In October of 2012,the interest rate on money market accounts was about 0.4 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?

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 2012,the Interest Rate on Money Market Accounts