The speculative demand for money is inversely related to the?

A. interest rate
B. level of income
C. exchange rate
D. inflation rate

Correct Answer:

Option A – interest rate

Explanation

The speculative demand for money is simply a need for money for investment purposes, which is indirectly influenced by interest rates. When the rates of interest is high, people would most likely want to invest their money so as to get a high return on investment.