In which of the following situations do people want to hold less money?
A)when the price level or the interest rate increases
B)when the price level or the interest rate decreases
C)when the price level increases or the interest rate decreases
D)when the price level decreases or the interest rate increases

Question

Quizplus · Accepted Answer

People want to hold less money when the price level decreases because they need less cash for transactions, and when the interest rate increases because they can earn more by saving or investing rather than holding cash.

In Which of the Following Situations Do People Want to Hold