If real GDP decreases:
A)the money demand curve will shift to the right.
B)the money demand curve will shift to the left.
C)there will be an upward movement along the money demand curve.
D)there will be a downward movement along the money demand curve.

Question

Quizplus · Accepted Answer

When real GDP decreases, the demand for money typically decreases because there is less economic activity requiring transactions. This leads to a shift of the money demand curve to the left, not just a movement along the curve.

If Real GDP Decreases