Which of the following, other things constant, will shift the money demand curve to the right?
A) an increase in the interest rate
B) a decrease in the interest rate
C) an increase in real GDP
D) a decrease in real GDP

Question

Which of the following, other things constant, will shift the money demand curve to the right?  
A) an increase in the interest rate 
B) a decrease in the interest rate 
C) an increase in real GDP 
D) a decrease in real GDP

Quizplus · Accepted Answer

An increase in real GDP leads to higher income and spending, which increases the demand for money, shifting the money demand curve to the right.

Which of the Following, Other Things Constant, Will Shift the Money