单选题
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.
【正确答案】
A
【答案解析】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.