Which of the Following Is Correct

question 227

Multiple Choice

Which of the following is correct?

• A) The asset demand for money is downsloping because the opportunity cost of holding money declines as the interest rate rises.
• B) The asset demand for money is downsloping because the opportunity cost of holding money increases as the interest rate rises.
• C) The transactions demand for money is downsloping because the opportunity cost of holding money varies inversely with the interest rate.
• D) The asset demand for money is downsloping because bond prices and the interest rate are directly related.

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