Which of the following would cause a movement upward and to the left along the money demand curve?
A) an increase in the interest rate
B) a decrease in the interest rate
C) a decrease in real GDP
D) an increase in real GDP

Question

Which of the following would cause a movement upward and to the left along the money demand curve?  
A) an increase in the interest rate 
B) a decrease in the interest rate 
C) a decrease in real GDP 
D) an increase in real GDP

Quizplus · Accepted Answer

An increase in the interest rate would cause a movement upward and to the left along the money demand curve because higher interest rates make holding money less attractive (since holding money does not earn interest), leading people to hold less of it.

Which of the Following Would Cause a Movement Upward and to the Left