If the demand for money increases, how will the money demand curve be affected?
A) There will be a movement downward along the money demand curve.
B) There will be a movement upward along the money demand curve.
C) There will be a rightward shift of the money demand curve.
D) There will be a leftward shift of the money demand curve.

Question

If the demand for money increases, how will the money demand curve be affected?  
A) There will be a movement downward along the money demand curve. 
B) There will be a movement upward along the money demand curve. 
C) There will be a rightward shift of the money demand curve. 
D) There will be a leftward shift of the money demand curve.

Quizplus · Accepted Answer

An increase in demand for money means that people want to hold more money for transactions or as a store of value. This means that at every interest rate, people will be willing to hold more money. This results in a rightward shift of the money demand curve.

If the Demand for Money Increases, How Will the Money