Which of the following statements best completes the sentence, "All other factors constant, as the nominal interest rate increases, the opportunity cost of money..."?

Question

Quizplus · Accepted Answer

As the nominal interest rate increases, the opportunity cost of holding money increases because people can earn more interest by saving or investing. This leads to an increase in the velocity of money as people hold less cash, and the quantity of money people want to hold decreases.

Which of the Following Statements Best Completes the Sentence, "All