Asked by Tyler Schmitt on Jul 19, 2024
Verified
When the market for money is drawn with the value of money on the vertical axis and the quantity of money on the horizontal axis, the money demand curve slopes
A) upward, because at higher prices people want to hold more money.
B) downward, because at higher prices people want to hold more money.
C) downward, because at higher price people want to hold less money.
D) upward, because at higher prices people want to hold less money.
Money Demand Curve
A graphical representation illustrating the relationship between the quantity of money demanded and the interest rate, showing how they vary inversely.
- Explore the influence of alterations in the money supply on consumer demand, the worth of money, and the state of economic equilibrium.
Verified Answer
SP
Stacy ProutyJul 22, 2024
Final Answer :
B
Explanation :
The money demand curve slopes downward because at higher prices (or lower value of money), people need or want to hold more money to purchase goods and services, reflecting an inverse relationship between the value of money and the quantity demanded.
Learning Objectives
- Explore the influence of alterations in the money supply on consumer demand, the worth of money, and the state of economic equilibrium.