An increase in real GDP will shift the money demand curve to the ________,causing the nominal interest rate to ________.

Question

Quizplus · Accepted Answer

An increase in real GDP leads to an increase in the demand for money, as there is more economic activity and more transactions taking place. This shift in the money demand curve to the right puts upward pressure on the nominal interest rate, as people and businesses need more money to finance their increased spending. Therefore, the correct answer is A) right; increase.

An Increase in Real GDP Will Shift the Money Demand