The quantity of money demanded will increase as interest rates increase.

Name: The quantity of money demanded will increase as interest rates increase.
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Question

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According to the theory of the demand for money, the quantity of money demanded will decrease as interest rates increase. This is because as interest rates increase, the opportunity cost of holding money increases, so people will reduce their demand for money and invest in other assets that offer a higher return.

The Quantity of Money Demanded Will Increase as Interest Rates