Question

In general the more money (M1) held by the public, the greater the tendency for people to spend and the public holds more money when interest rates are _________.

Answer 1

Low

Step-by-step explanation:

There is a negative relationship between interest rates and money supply. People hold more money in their pockets rather than to deposit in the banks when interest rate is low. People save money when the know the reward of saving money is higher. When the interest is low, investment increases and saving decreases which leads to more public sending.