________ real GDP increases the demand for money and ________ the nominal interest rate decreases the quantity of money demanded.
A) Increasing; increasing
B) Increasing; decreasing
C) Decreasing; increasing
D) Decreasing; decreasing

Question

Quizplus · Accepted Answer

Increasing real GDP increases the demand for money because more transactions are taking place, while an increasing nominal interest rate decreases the quantity of money demanded as people prefer to hold interest-bearing assets.

________ Real GDP Increases the Demand for Money and ________

Real GDP Increases the Demand for Money and