Which of the Following Will Most Likely Cause a Decrease

question 50

Multiple Choice

Which of the following will most likely cause a decrease in the quantity of money demanded?

• A)an increase in the price level
• B)an increase in the interest rate
• C)an increase in nominal aggregate output
• D)a decrease in the interest rate

---

Definitions:

Duration-based Immunization

A strategy used in portfolio management to minimize the risk of interest rate fluctuations by matching the duration of assets and liabilities.

Rebalanced

The process of realigning the weightings of a portfolio of assets to maintain an original or desired level of asset allocation or risk.

Modified Duration

A measure of the price sensitivity of a bond or other debt instrument to an interest rate change, factoring in the changing cash flow timings.

Price-volatile

Characteristic of a financial instrument whose price can undergo significant fluctuations in a short period.