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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Definitions:

Obligate Parasites

Organisms that cannot complete their life-cycle without exploiting a suitable host.

Steam Pressure

The pressure exerted by steam, especially in steam engines or cooking devices, often measured in pounds per square inch (psi) or bar.

Fahrenheit

A scale for temperature measurement where water freezes at 32 degrees and boils at 212 degrees under standard atmospheric pressure.

Multicellular Parasites

Organisms composed of multiple cells that live off and may harm their hosts, obtaining nutrients at the host's expense.