Answer
b.) lower interest rates reduce the opportunity cost of holding money.
Work Step by Step
With lower interest rates people will spend more money rather than hold more money.
Economics: Principles, Problems, and Policies, 19th Edition
by McConnell, Campbell R.; Brue, Stanley L.; Flynn, Sean M.
Published by
McGraw-Hill Education
ISBN 10:
0073511447
ISBN 13:
978-0-07351-144-3
Chapter 33 - Interest Rates and Monetary Policy - Quick Quiz for Figure 33.1 - Page 672: 3
Update this answer!
You can help us out by revising, improving and updating this answer.
Update this answerAfter you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.
