Which of the following is CORRECT? The demand for money
A) increases as real GDP increases.
B) decreases as the price level increases.
C) depends on the quantity of money.
D) increases when the nominal interest rate rises.

Question

Quizplus · Accepted Answer

The demand for money increases as real GDP increases because a higher level of economic activity requires more transactions, which in turn requires more money to facilitate these transactions.

Which of the Following Is CORRECT? the Demand for Money