Which of the following influences the demand for money?

Question

Quizplus · Accepted Answer

The demand for money is influenced by both the money supply and the interest rate. An increase in the money supply leads to an increase in the supply of money, thereby decreasing the demand for money. Conversely, a higher interest rate leads to an increase in the opportunity cost of holding money, which increases the demand for money. The level of income can affect the demand for money indirectly through its impact on wealth and the transaction demand for holding money. However, it is not the only factor that influences the demand for money.

Which of the Following Influences the Demand for Money