Other things the same,a decrease in the price level motivates people to hold
A)less money,so they lend less,and the interest rate rises.
B)less money,so they lend more,and the interest rate falls.
C)more money,so they lend more,and the interest rate rises.
D)more money,so they lend less,and the interest rate falls.

Question

Quizplus · Accepted Answer

A decrease in the price level reduces the need for money to conduct transactions, leading people to hold less money. As a result, they lend more, increasing the supply of loanable funds, which causes the interest rate to fall.

Other Things the Same,a Decrease in the Price Level Motivates