When the interest rate falls, the:
A) Asset demand for money decreases
B) Transactions demand for money increases
C) Total amount of money demanded increases
D) Total amount of money demanded decreases

Question

Quizplus · Accepted Answer

When the interest rate falls, the opportunity cost of holding money decreases, leading to an increase in the total amount of money demanded as people prefer to hold more cash rather than invest in interest-bearing assets.

When the Interest Rate Falls, The