The demand for nominal money
A) is the same as the demand for real money.
B) decreases as the price level increases.
C) depends on the quantity of money.
D) increases as the price level increases.

Question

Quizplus · Accepted Answer

The demand for nominal money increases as the price level increases because individuals and businesses need more money to purchase the same amount of goods and services at a higher price level. This relationship between the price level and the demand for nominal money is known as the quantity theory of money.

The Demand for Nominal Money