The quantity of money demanded to satisfy transactions needs:
A) is intended for unexpected expenditures.
B) increases with the level of real GDP.
C) decreases with the level of real GDP.
D) is unrelated to either national income or the interest rate.

Question

Quizplus · Accepted Answer

Transactions demand for money primarily depends on the level of real GDP. As the level of output and income in the economy increases, the demand for money also increases since people need money to carry out more transactions.

The Quantity of Money Demanded to Satisfy Transactions Needs