Suppose a new regulation lowers the interest rates banks can offer on checking account funds. This will result in a shift _____ of the money _____ curve.

Question

Quizplus · Accepted Answer

When the interest rates banks can offer on checking account funds decrease, people will be less inclined to deposit their money in banks because the opportunity cost of holding money in the bank increases. This results in a decrease in demand for the banks' offerings, and a shift to the left in the demand curve.

Suppose a New Regulation Lowers the Interest Rates Banks Can