Refer to the above information.All else equal, the transaction demand for money in this table would increase if:
A)nominal GDP increased.
B)the interest rate fell.
C)the supply of money increased.
D)the supply of money decreased.

Question

Refer to the above information.All else equal, the transaction demand for money in this table would increase if:
A)nominal GDP increased. 
B)the interest rate fell. 
C)the supply of money increased. 
D)the supply of money decreased.

Quizplus · Accepted Answer

Transaction demand for money is directly related to nominal GDP. If nominal GDP increases, the transaction demand for money also increases as more money is needed to facilitate transactions. Interest rates and money supply have an indirect impact on transaction demand.

Refer to the Above Information