The quantity of asset demand for money that people wish to hold increases as the rate of interest falls.

Name: The quantity of asset demand for money that people wish to hold increases as the rate of interest falls.
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Question

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This is known as the interest rate effect in economics. As the rate of interest falls, the opportunity cost of holding money falls, making it more attractive to hold onto cash and increasing the demand for money.

The Quantity of Asset Demand for Money That People Wish