When the Interest Rate Rises, the Quantity of Money Demanded

question 266

Multiple Choice

When the interest rate rises, the quantity of money demanded decreases because

• A) people move funds from interest- bearing assets into money.
• B) the price level also rises and people decrease their demand for money.
• C) people will buy fewer goods and hold less money.
• D) people shift funds from money holdings to interest- bearing assets.

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Definitions:

Vision

The ability to see, interpreted by the brain's processing of signals sent from the eyes.

Mydriatic

Relating to the dilation of the pupil, often due to medication or specific health conditions.

Mydriat

Often refers to mydriasis, the dilation of the pupil of the eye caused by disease, trauma, or the use of certain drugs.

Dilation

The action of expanding or being expanded in diameter or volume; in medical contexts, it often refers to the expansion of a passage or cavity.