How does an increase in interest rates affect the opportunity cost of holding money and the repayment to creditors?
a. The opportunity cost of holding money decreases when the interest rate increases, so people desire to hold more money.
b. The opportunity cost of holding money decreases when the interest rate increases, so people desire to hold less money.
c. The opportunity cost of holding money increases when the interest rate increases, so people desire to hold more money.
d. The opportunity cost of holding money increases when the interest rate increases, so people desire to hold less money.