In Which Situation Do People Want to Hold More Money

question 21

Multiple Choice

In which situation do people want to hold more money?

• A) when the price level and the interest rate increases
• B) when the price level and the interest rate decreases
• C) when the price level increases and the interest rate decreases
• D) when the price level decreases and the interest rate increases

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Definitions:

Principal

The original amount of money loaned or invested, separate from interest or earnings.

Terminate

To bring to an end or conclude something, such as a contract, employment, or process.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Relationship

A relationship is a connection, association, or involvement between people, which can be based on kinship, love, friendship, or professional interactions.