In 2006, real GDP in Belgium grew at a 3 percent rate and inflation was 1.8 percent while the population did not change. As a result, there was ________ demand for money curve in Belgium.

Question

Quizplus · Accepted Answer

A rightward shift of the demand for money curve occurs when the economy grows (as indicated by the increase in real GDP) because businesses and consumers need more money to handle the increased number of transactions associated with economic growth. Inflation also affects the demand for money, but the primary driver in this scenario is the growth in real GDP.

In 2006, Real GDP in Belgium Grew at a 3