If the Interest Rate Falls,the Opportunity Cost of Holding Money

question 11

Multiple Choice

If the interest rate falls,the opportunity cost of holding money __________ and the quantity demanded of money __________.

• A) rises,rises
• B) rises,falls
• C) falls,rises
• D) falls,falls

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Definitions:

Catgut

A type of cord previously made from the natural fibers in the intestines of sheep or other animals, commonly used in making strings for musical instruments or surgical sutures.

Derived Demand

The demand for a factor of production or intermediate good that results from the demand for another intermediate or final good.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders.

Venture Capital

Capital provided by investors to startups and small enterprises deemed to possess significant potential for long-term expansion.