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Jaydee Ramos
on Nov 16, 2024

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When the interest rate decrease, the opportunity cost of holding money

A) decreases, so the quantity of money demanded decreases.
B) decreases, so the quantity of money demanded increases.
C) increases, so the quantity of money demanded decreases.
D) increases, so the quantity of money demanded increases.

Interest Rate

The percentage of a loan amount charged by lenders to borrowers for the use of their money, expressed as an annual percentage.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing what is lost by choosing one option over another.

Money Demanded

The total amount of money that households and businesses wish to hold at a given time, often influenced by interest rates.

  • Understand the relationship between interest rates and the quantity of money demanded.
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tiara emilyaNov 22, 2024
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