Refer to the diagram below for the market for money.Other things equal,the money demand curve in the diagram would shift leftward if:

Question

Quizplus · Accepted Answer

A decrease in nominal GDP indicates a decrease in overall economic activity, which typically results in a decrease in the demand for money for transactions purposes. This would shift the money demand curve leftward. Increases in asset demand for money or transactions demand for money, as well as a rise in the overall price level, would shift the money demand curve rightward.

Refer to the Diagram Below for the Market for Money