What is the relationship between interest rate and demand for money?

2024

Answer: B. Inverse — Demand for money and the interest rate generally have an inverse relationship: as the interest rate rises, the demand for money falls.

A.
No relationship exists
B.
Inverse
C.
Direct
D.
Proportionate

Attempted by 2 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.

Explore the full course: Up Police Computer Operator