When the Interest Rate Decreases, What Happens to the Opportunity

question 37

Multiple Choice

When the interest rate decreases, what happens to the opportunity cost of holding money and the quantity of money demanded?

• A) The opportunity cost of holding money increases, so the quantity of money demanded increases.
• B) The opportunity cost of holding money increases, so the quantity of money demanded decreases.
• C) The opportunity cost of holding money decreases, so the quantity of money demanded increases.
• D) The opportunity cost of holding money decreases, so the quantity of money demanded decreases.

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