Answer to Question #103330 in Macroeconomics for lebogang ratlabala

Question

Which one of the following statements 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

Answer 1

[1] As the income level increases, the amount of money that individuals hold, decreases.