The demand for money in an economy is high when the:
A)real GDP is low.
B)personal tax rate is low.
C)unemployment rate is high.
D)price level is high.
E)interest rate is high.

Name: The demand for money in an economy is high when the: A)real GDP is low. B)personal tax rate is low. C)unemployment rate is high. D)price level is high. E)interest rate is high.
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Question

Quizplus · Accepted Answer

When the price level is high, people need more money to carry out transactions, leading to a higher demand for money.

The Demand for Money in an Economy Is High When