Which of the following statements is/are correct with respect to the demand for money?
i. When the interest rate is high, the demand for money is low.
ii. When the interest rate is low, demand for money is also low.
iii. When the interest rate is high, demand for money is also high.
iv. When the interest rate is low, demand for money is high.

Correct option is B

The correct answer is (b) Only i and iv
Detailed Explanation:
The relationship between interest rates and the demand for money is typically inverse. Here’s why the statements i and iv are correct:
i. When the interest rate is high, the demand for money is low.
 Higher interest rates make borrowing more expensive and saving more attractive. Thus, individuals and businesses are likely to hold less cash (or money in easily liquidated accounts) because they prefer to save or invest where they can earn higher returns.
iv. When the interest rate is low, demand for money is high.
 Lower interest rates make saving less attractive and borrowing cheaper. This encourages spending and investment, leading to a higher demand for liquidity or ready cash.
The other statements, ii and iii, contradict this principle:
ii. When the interest rate is low, demand for money is also low. - This is incorrect because lower interest rates generally increase the demand for money, as explained above.
iii. When the interest rate is high, demand for money is also high. - This is incorrect because higher interest rates usually decrease the demand for money, as people prefer to save or invest at higher rates rather than hold cash.