We hold more money when the interest rate A. rises because the opportunity cost of holding money is going up. B. falls because it has a low opportunity cost. C. falls because at lower interest rates the opportunity cost of holding money goes up. D. rises because bonds are now too expensive so we sell them to hold more money.
We hold more money when the interest rate A. rises because the opportunity cost of holding money is going up. B. falls because it has a low opportunity cost. C. falls because at lower interest rates the opportunity cost of holding money goes up. D. rises because bonds are now too expensive so we sell them to hold more money.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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We hold more money when the interest rate
A. rises because the
B. falls because it has a low opportunity cost.
C. falls because at lower interest rates the opportunity cost of holding money goes up.
D. rises because bonds are now too expensive so we sell them to hold more money.
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