The downward slope of the demand for money curve reflects the fact that

Question

Quizplus · Accepted Answer

As the interest rate falls, the opportunity cost of holding money decreases, making it more attractive to hold money. Therefore, people hold more of their wealth in the form of money, resulting in a higher quantity demanded of money at lower interest rates. This relationship between the interest rate and the quantity demanded of money is reflected in the downward slope of the demand for money curve.

The Downward Slope of the Demand for Money Curve Reflects