When the Nominal Interest Rate Rises,the Quantity of Money Demanded

question 509

Multiple Choice

When the nominal interest rate rises,the quantity of money demanded decreases because

• A) people will buy fewer goods and hold less money.
• B) the price level also rises and people decrease their demand for money.
• C) people move funds from interest-bearing assets into money.
• D) people shift funds from money holdings to interest-bearing assets.

---

Definitions:

Work Sheet

A document used in accounting to gather information from ledger accounts for the preparation of financial statements.

Temporary Accounts

Accounts used to collect revenues, expenses, and dividends information which are then transferred to permanent accounts at the end of the accounting period.

Closed

Refers to an account or period that has been concluded and no longer accepts entries or transactions.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is exchanged.