An increase in real GDP leads to a
A)movement upward along the demand for money curve but no shift of the curve.
B)movement downward along the demand for money curve but no shift of the curve.
C)neither a shift in the demand for money curve nor a movement along the curve.
D)leftward shift in the demand for money curve.
E)rightward shift in the demand for money curve.

Question

Quizplus · Accepted Answer

An increase in real GDP increases the demand for transactions, which leads to a rightward shift in the demand for money curve as people need more money for increased economic activity.

An Increase in Real GDP Leads to a