Asked by
Jaspinder Singh
on Dec 16, 2024
Verified
Other things constant,the quantity of money demanded varies:
A) directly with the market interest rate.
B) inversely with the market interest rate.
C) inversely with the price level.
D) directly with the price level.
E) inversely with the unemployment rate.
Money Demanded
The total amount of money that households and firms want to hold at any given time, influenced by income levels, interest rates, and economic activity.
Market Interest Rate
The prevailing rate at which borrowers can obtain money from lenders, influenced by supply and demand in the money market.
- Recognize the relationship between interest rates and the quantity of money demanded.
Verified Answer
RK
Learning Objectives
- Recognize the relationship between interest rates and the quantity of money demanded.