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.

Question

Quizplus · Accepted Answer

When the interest rate falls, the opportunity cost of holding money decreases, making it more attractive for people to hold a larger quantity of money.

People Choose to Hold a Larger Quantity of Money If