As real GDP increases, which of the following occurs?
A) The demand for money curve shifts leftward.
B) The nominal interest rate falls as the demand for money curve shifts leftward.
C) The demand for money curve shifts rightward.
D) The demand for money decreases and there is a movement upward along the demand for money curve.
E) The demand for money increases and there is a movement downward along the demand for money curve.

Question

Quizplus · Accepted Answer

As real GDP increases, the economy is producing and consuming more goods and services, which typically increases the demand for transactions that require money. This increased demand for transactions shifts the demand for money curve to the right.

As Real GDP Increases, Which of the Following Occurs