Which of the following decreases the demand for nominal money?
A) an increase in real GDP
B) an increase in the quantity of money
C) a decrease in the price level
D) a decrease in the nominal interest rate

Question

Quizplus · Accepted Answer

A decrease in the price level reduces the demand for nominal money, as individuals and businesses require less money to purchase goods and services at lower prices. An increase in real GDP and a decrease in the nominal interest rate generally increase the demand for nominal money, while an increase in the quantity of money may increase or decrease the demand depending on other factors such as inflation expectations.

Which of the Following Decreases the Demand for Nominal Money