As the price level falls
A)people will want to hold more money,so the interest rate rises.
B)people will want to hold more money,so the interest rate falls.
C)people will want to hold less money,so the interest rate falls.
D)people will want to hold less money,so the interest rate rises.

Question

Quizplus · Accepted Answer

As the price level falls, people need less money for transactions, so they hold less money, leading to a decrease in the demand for money and causing the interest rate to fall.

As the Price Level Falls