Figure 26-1
-Refer to Figure 26-1.In the figure,the money demand curve would move from Money demand1 to Money demand2 if
A)real GDP increased.
B)the price level decreased.
C)the interest rate increased.
D)the Federal Reserve sold Treasury securities.

Question

Figure 26-1 
-Refer to Figure 26-1.In the figure,the money demand curve would move from Money demand1 to Money demand2 if
A)real GDP increased. 
B)the price level decreased. 
C)the interest rate increased. 
D)the Federal Reserve sold Treasury securities.

Quizplus · Accepted Answer

An increase in real GDP would increase the demand for money as more transactions are taking place, shifting the money demand curve to the right from Money demand1 to Money demand2.

Figure 26-1 -Refer to Figure 26-1.In the Figure,the Money Demand Curve Would