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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. 

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