Choose the correct statement.
A)The quantity of money measured in constant dollars is nominal money.
B)The quantity of money measured in dollars is nominal money.
C)The quantity of nominal money demanded is inversely related to the price level.
D)As real GDP increases, the quantity of nominal money demanded decreases.
E)As the interest rate rises, the quantity of real money demanded increases.

Question

Quizplus · Accepted Answer

Nominal money refers to the amount of money in actual dollars as opposed to adjusted for inflation or other variables. Option B is the only one that correctly identifies nominal money. The other options either wrongly describe the definition of nominal money or make incorrect claims about the relationship between nominal money and other economic variables.

Choose the Correct Statement