All else held equal, an increase in the amount of transactions (goods and services purchased) in the economy results in
A)a decrease in the demand for money.
B)a steeper demand-for-money curve.
C)an increase in the demand for money.
D)an increase in the quantity demanded of money.
E)no change in the demand for money.

Question

Quizplus · Accepted Answer

An increase in the amount of transactions in the economy leads to an increase in the demand for money, as individuals and businesses need more money to conduct transactions. This is because money is required to purchase goods and services, so an increase in the amount of transactions requires an increase in the amount of money demanded. Therefore, choice C is the correct answer.

All Else Held Equal, an Increase in the Amount of Transactions