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Macroeconomics

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The Demand for Money

MACRO-7K9SQQ

Which of the following statements correctly explains why the money demand curve is downward-sloping?

A

High interest rates decrease the desire for people to hold money and increase the desire to hold bonds.

B

High interest rates make people want to hold more money and fewer bonds.

C

High interest rates increase the desire for people to hold money and increase the desire to hold bonds.

D

Low interest rates decrease the desire for people to hold money and also reduce the desire to hold bonds.