In which of the following situations do people want to hold more money?
A)when the price level or the interest rate increases
B)when the price level or the interest rate decreases
C)when the price level increases or the interest rate decreases
D)when the price level decreases or the interest rate increases

Question

Quizplus · Accepted Answer

People want to hold more money when the price level increases because they need more money for transactions, and when the interest rate decreases because the opportunity cost of holding money is lower.

In Which of the Following Situations Do People Want to Hold