People Choose to Hold a Larger Quantity of Money If

question 3

Multiple Choice

People choose to hold a larger quantity of money if

• A)the interest rate rises,which causes the opportunity cost of holding money to rise.
• B)the interest rate falls,which causes the opportunity cost of holding money to rise.
• C)the interest rate rises,which causes the opportunity cost of holding money to fall.
• D)the interest rate falls,which causes the opportunity cost of holding money to fall.

---

Definitions:

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how spread out the numbers are from the mean.

Mean

The arithmetic average of a set of values, calculated by adding all the values together and then dividing by the number of values.

Standard Deviations

An indicator of how much the values in a collection differ from each other.

Probability Density Functions

Mathematical functions that describe the likelihood of a continuous random variable taking on a particular value.