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    Question

    What is the relationship between interest rate and

    demand for money?
    A No relationship exists Correct Answer Incorrect Answer
    B Inverse Correct Answer Incorrect Answer
    C Direct Correct Answer Incorrect Answer
    D Proportionate Correct Answer Incorrect Answer

    Solution

    The relationship between interest rates and the demand for money is generally inverse: as interest rates rise, the demand for money tends to decrease, and vice versa. 

    Practice Next

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