Figure 15-1
-Refer to Figure 15-1.In the figure above,the money demand curve would move from Money demand1 to Money demand2 if

Question

Figure 15-1 
-Refer to Figure 15-1.In the figure above,the money demand curve would move from Money demand1 to Money demand2 if

Quizplus · Accepted Answer

The money demand curve shows the relationship between the interest rate and the quantity of money demanded at each interest rate, for a given level of real GDP and price level. If the price level increases, individuals and firms will need to hold more money to make transactions, causing an increase in the quantity of money demanded at each interest rate. This shifts the money demand curve to the right from Money demand1 to Money demand2. Therefore, the correct answer is B.

Figure 15-1 -Refer to Figure 15-1.In the Figure Above,the Money Demand Curve