The Money Demand Curve Is Downward Sloping Because Lower Interest

question 95

Multiple Choice

The money demand curve is downward sloping because lower interest rates:

• A)lower the opportunity cost of holding money and cause households and firms to switch from money to financial assets.
• B)lower the opportunity cost of holding money and cause households and firms to switch from financial assets to money.
• C)raise the opportunity cost of holding money and cause households and firms to switch from money to shares.
• D)raise the opportunity cost of holding money and cause households and firms to switch from money to bonds.

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