Because an increase in the nominal interest rate raises the opportunity costs of holding money, the money demand curve:
A)shifts to the right.
B)shifts to the left.
C)slopes upward.
D)slopes downward.

Question

Quizplus · Accepted Answer

The money demand curve is a typical demand curve insofar as it is downward-sloping. The money demand curve shows the inverse relationship between nominal interest rates and the quantity of money demanded.

Because an Increase in the Nominal Interest Rate Raises the Opportunity