Answer to Question #102950 in Macroeconomics for Michael

Question

Which one of the following statement about the demand for money is incorrect?

1. As the income level increases, the amount of money that individuals hold, decreases
2. The quantity of money that people hold is negatively related to the interest rate level
3. The income level and the interest rate level affect the quantity of money
4. An increase in the interest rate leads to a decrease in the quantity of money created

B. Which one of the following is the essential function of money

1. Medium of exchange
2. Store of value
3. Factor of production
4. Unit of account

Answer 1

A-1

B-1