Which of the following statements is not correct?
A)Given the supply of money, a decline in the demand for money will tend to reduce the equilibrium GDP.
B)Given the supply of money, the equilibrium interest rate will vary directly with the level of money GDP.
C)Given the demand for money, the equilibrium interest rate will vary inversely with the supply of money.
D)Given the supply of money, the equilibrium interest rate will vary directly with the demand for money.

Question

Quizplus · Accepted Answer

A decline in the demand for money, with a given supply, would typically lead to a lower interest rate, which could stimulate investment and consumption, potentially increasing GDP, not reducing it.

Which of the Following Statements Is Not Correct