All else the same, when real GDP increases the
A) demand for money decreases.
B) demand for money increases.
C) supply of money decreases.
D) supply of money increases.
E) supply of money does not change and the demand for money does not change.

Question

Quizplus · Accepted Answer

When real GDP increases, there is more economic activity and transactions, which increases the demand for money to facilitate those transactions. Therefore, the demand for money increases.

All Else the Same, When Real GDP Increases the