In which situation do people want to hold more money?
A) when the price level and the interest rate increases
B) when the price level and the interest rate decreases
C) when the price level increases and the interest rate decreases
D) when the price level decreases and 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 Situation Do People Want to Hold More Money