The demand for money is inversely related to the real interest rate because:()
A. the cost of holding money falls as the real interest rate goes down.
B. increasing wealth makes cash balances unnecessary.
C. taxes make productive uses of funds less profitable.
参考答案:A
解析:
At lower real interest rates the cost of holding money ( foregone interest earnings) is less and the quantity of money that individuals are willing to hold increases.