Which of the following determines how much money an individual will decide to hold?

Question

Quizplus · Accepted Answer

The price level is a primary factor in determining how much money an individual will decide to hold. When prices rise, individuals will need to hold more money to cover the higher costs of goods and services. Conversely, when prices fall, individuals will require less money to cover their expenses, and so they will likely spend or invest more of their remaining funds.

Note: While the supply of money can indirectly impact an individual's decision to hold money, it is not a direct determinant. Instead, it may affect other factors such as interest rates, which could in turn impact an individual's decision to hold money.

Which of the Following Determines How Much Money an Individual