Economics · Macroeconomics
The speculative demand for money curve (liquidity preference curve) is downward sloping from left to right because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1as interest rates rise, bond prices increase making cash more attractive
- 2as interest rates rise, the opportunity cost of holding liquid money increases✓
- 3as interest rates fall, the opportunity cost of holding cash remains constant
- 4when interest rates are low, the Central Bank automatically reduces the money supply
Correct answer
as interest rates rise, the opportunity cost of holding liquid money increases
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Macroeconomics MCQs →Want more practice questions on Macroeconomics?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Macroeconomics