The Money-Demand Curve Is Downward-Sloping Because

question 60

Multiple Choice

The money-demand curve is downward-sloping because:

• A)people will want to hold less money as the interest rate falls
• B)people will want to hold more money as the interest rate falls
• C)interest rates rise as the Reserve Bank reduces the quantity of money demanded
• D)interest rates fall as the Reserve Bank reduces the supply of money

---

Definitions:

Deductions

Amounts that are subtracted from gross income or revenue, leading to a lower taxable income or tax liability.

Take-home Pay

The net amount of income that an employee receives after deductions like taxes, social security, and retirement contributions are subtracted from their gross salary.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest obligations, calculated by dividing earnings before interest and taxes by interest expenses.

Interest Expense

The cost incurred by an entity for borrowed funds, typically expressed as an annual interest rate on debts such as loans and bonds.