★ Key Takeaways
If the Interest Rate Rises, Then the Opportunity Cost of Holding Money Balances Rises, and So the Quantity Demanded of Money Balances Decreases. See Section: the Money Market in the Keynesian Transmission Mechanism. an Increase in the Supply of Money the Interest Rate, Which Investment, Which Aggregate Demand.
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If the Interest Rate Rises, Then the Opportunity Cost of Holding Money Balances Rises, and So the Quantity Demanded of Money Balances Decreases. See Section: the Money Market in the Keynesian Transmission Mechanism. an Increase in the Supply of Money the Interest Rate, Which Investment, Which Aggregate Demand.
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