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4 years ago

15

If the interest rate decreases

1 answer:

Rashid [163]4 years ago

6 0

Answer:

The correct answer is option A.

Explanation:

When the interest rate decreases people will get less return on deposits. So they will prefer to hold money as a cash instead of depositing in banks. Similarly, if price level increases people will need more money to pay for transactions. So, the transactionary demand for money will increase. People will prefer to hold more money.

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