Refer to the information provided in Figure 10.2 below to answer the questions that follow. Figure 10.2
-Refer to Figure 10.2. Suppose the money demand is currently at Point D. A movement to point C could be caused by
A) a decrease in the interest rate.
B) a decrease in nominal income.
C) an increase in the interest rate.
D) an increase in the price level.

Question

Refer to the information provided in Figure 10.2 below to answer the questions that follow.  Figure 10.2
-Refer to Figure 10.2. Suppose the money demand is currently at Point D. A movement to point C could be caused by
A) a decrease in the interest rate. 
B) a decrease in nominal income. 
C) an increase in the interest rate. 
D) an increase in the price level.

Quizplus · Accepted Answer

A movement from Point D to Point C on a money demand curve typically indicates a decrease in nominal income, which reduces the demand for money at any given interest rate.

Refer to the Information Provided in Figure 10