Subject
General Knowledge
Topic
Banking & Financial Institutions
An increase in the rate of interest would increase-
An increase in the rate of interest would increase-
ক)
The transaction demand for moneyখ)
The opportunity cost of holding moneyগ)
The asset demand for moneyঘ)
The price of BondExplanation
- an increase in the interest rate would increase the opportunity cost of holding money, because it means that people could earn more money by investing their money in other assets, such as bonds or savings accounts. - This would lead to a decrease in the demand for money, as people would prefer to hold other assets insteadRelated questions
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