What is the relationship between interest rate and demand for money?
2024
What is the relationship between interest rate and demand for money?
- A.
No relationship exists
- B.
Inverse
- C.
Direct
- D.
Proportionate
Attempted by 1 students.
Show answer & explanation
Correct answer: B
Demand for money and the interest rate generally have an inverse relationship: as the interest rate rises, the demand for money falls.