In October of 20142, the interest rate on money market accounts was about 0.2 percent. In 2007, the interest rate on money market accounts was about 4.0 percent. What has been the impact on the demand for money curve from this fall in the interest rate?

Question

Quizplus · Accepted Answer

A fall in the interest rate typically results in a downward movement along the demand for money curve, as lower interest rates make holding money more attractive compared to other investments, increasing the quantity of money demanded at existing price levels.

In October of 20142, the Interest Rate on Money Market