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If the Interest Rate Is Higher Than Normal,people Are More

Question 29

Multiple Choice

If the interest rate is higher than normal,people are more likely to hold


A) bonds instead of money because as the interest rate starts to rise,the value of the bonds will increase.
B) bonds instead of money because the opportunity cost of money is high.
C) money instead of bonds because the brokerage fees and other costs of buying bonds are high when the interest rate is low.
D) money instead of bonds because there is a speculative motive for holding a larger amount of money.

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