Rising nominal GDP will increase the demand for money and short-term interest rates.

Name: Rising nominal GDP will increase the demand for money and short-term interest rates.
Brand: Quizplus
Rating: 4.9 (33 reviews)

Question

Quizplus · Accepted Answer

When nominal GDP rises, people tend to have more money to spend, causing an increase in demand for money. This higher demand leads to an increase in short-term interest rates as lenders can charge higher rates due to increased demand for borrowing.

Rising Nominal GDP Will Increase the Demand for Money and Short-Term