If people decide to hold less money,then
A)money demand decreases,there is an excess supply of money,and interest rates rise.
B)money demand decreases,there is an excess supply of money,and interest rates fall.
C)money demand increases,there is an excess demand for money,and interest rates fall.
D)money demand increases,there is an excess demand for money,and interest rates rise.

Question

Quizplus · Accepted Answer

When people decide to hold less money, the demand for money decreases which leads to an excess supply of money in the market. As a result, interest rates fall as lenders try to attract borrowers by offering lower interest rates.

If People Decide to Hold Less Money,then