Refer to the information provided in Figure 11.2 below to answer the questions that follow.
Figure 11.2
-Refer to Figure 11.2.Suppose money demand is currently at Point A.An increase money demand could be caused by

Question

Refer to the information provided in Figure 11.2 below to answer the questions that follow.
  Figure 11.2
-Refer to Figure 11.2.Suppose money demand is currently at Point A.An increase money demand could be caused by

Quizplus · Accepted Answer

An increase in income shifts the money demand curve to the right, causing the equilibrium point to move from A to B, indicating an increase in money demand. Choices A and C do not make sense as they suggest that a change in interest rates could cause an increase or decrease in money demand, respectively, whereas the graph suggests that interest rate and money demand move in the same direction. Choice D also does not make sense as a decrease in income would shift the money demand curve to the left, indicating a decrease in money demand.

Refer to the Information Provided in Figure 11