In which situation do people want to hold less 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 less money when the price level decreases and the interest rate increases because lower prices reduce the need for cash transactions, and higher interest rates make saving more attractive than holding cash.

In Which Situation Do People Want to Hold Less Money