Which of the following is true?
A)The quantity of money demanded varies inversely with the nominal rate of interest.
B)Money market equilibrium occurs at that nominal interest rate where the quantity of money demanded equals the quantity of money supplied.
C)Rising national income will shift the demand for money to the right, leading to a new higher equilibrium nominal interest rate.
D)All of the above are true.

Question

Which of the following is true?
A)​The quantity of money demanded varies inversely with the nominal rate of interest.
B)​Money market equilibrium occurs at that nominal interest rate where the quantity of money demanded equals the quantity of money supplied.
C)​Rising national income will shift the demand for money to the right, leading to a new higher equilibrium nominal interest rate.
D)​All of the above are true.

Quizplus · Accepted Answer

All the statements provided are true regarding the principles of money demand, money supply, and how interest rates are determined in the money market. A) The quantity of money demanded typically decreases as the nominal interest rate increases because higher interest rates make holding money less attractive compared to other assets. B) Money market equilibrium is indeed achieved when the quantity of money demanded equals the quantity of money supplied, determining the equilibrium nominal interest rate. C) An increase in national income increases the demand for transactions, leading to a higher demand for money, which can shift the demand curve to the right and result in a higher equilibrium nominal interest rate if the money supply remains unchanged.

Which of the Following Is True