The equilibrium interest rate in the money market must rise as the real GDP (Y) increases, because:
A) there will be an increase in the demand for real money balances and a rightward shift of the money demand curve.
B) the higher interest rate will cause individuals to desire more real balances.
C) there will be an increase in the investment funds.
D) rising incomes means that the money supply must decrease.
Correct Answer:
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