An increase in real GDP
A)increases the buying and selling of goods and increases the demand for money as a medium of exchange.
B)increases the buying and selling of goods and decreases the demand for money as a medium of exchange.
C)decreases the buying and selling of goods and increases the demand for money as a medium of exchange.
D)decreases the buying and selling of goods and decreases the demand for money as a medium of exchange.

Question

Quizplus · Accepted Answer

An increase in real GDP means that more goods and services are being produced and exchanged. This translates to an increase in the demand for money as a medium of exchange to facilitate these transactions. Therefore, option A is the best choice.

An Increase in Real GDP