A change in which of the following variables would have a direct effect on money demand in the current period?
A) The current nominal interest rate.
B) The expected future nominal interest rate.
C) The expected future income.
D) The current real interest rate.
E) The expected future real interest rate.

Question

Quizplus · Accepted Answer

The current nominal interest rate directly affects money demand because it influences the opportunity cost of holding money versus other assets.

A Change in Which of the Following Variables Would Have