Because an Increase in the Nominal Interest Rate Raises the Opportunity

question 131

Multiple Choice

Because an increase in the nominal interest rate raises the opportunity costs of holding money, the money demand curve:

• A)shifts to the right.
• B)shifts to the left.
• C)slopes upward.
• D)slopes downward.

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Definitions:

Accident

An unexpected event, often unfavorable, that happens unintentionally, resulting in damage, injury, or loss.

Fallacy

An incorrect conviction, particularly one rooted in flawed reasoning.

Generalization

A broad statement or conclusion drawn from specific instances, applying to a wider set of circumstances.

Particulars

Refers to the specific, individual aspects or details of a subject or object that distinguish it from others.