Which of the following causes the quantity of money demanded to decrease?

Question

Quizplus · Accepted Answer

An increase in the interest rate will cause the opportunity cost of holding money to increase, which in turn will decrease the quantity of money demanded. The other choices are incorrect as a decrease in nominal income (Option A) would increase the quantity of money demanded, an increase in nominal income (Option B) would increase the quantity of money demanded, and an increase in the price level (Option C) would increase the quantity of money demanded due to the need for increased transactions.

Which of the Following Causes the Quantity of Money Demanded