The transactions demand for money will increase when
A) the rate of interest increases.
B) the price level falls.
C) nominal Gross Domestic Product (GDP) increases.
D) nominal Gross Domestic Product (GDP) decreases.
C
You might also like to view...
The quantity theory of money assumes that the velocity of money
Use the following graphs to answer the next question.
In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve, respectively. All numbers are in billions of dollars. The interest rate and the level of investment spending in the economy are at point C on the investment demand curve. To achieve the long-run goal of a noninflationary, full-employment output of Qf in the economy, the Fed should try to ________.
A. decrease aggregate demand by increasing the interest rate B. increase aggregate demand by increasing the interest rate C. make no change in the interest rate D. increase aggregate demand by decreasing the interest rate
Ceteris paribus, if the market demand for a product increases, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____
a. increase; indeterminate b. decrease; decrease c. indeterminate; decrease d. increase; increase
Prices in both the U.S. and China rise, but prices in China increase by a larger percentage. According to purchasing-power parity, the U.S. dollar
a. gains value both in terms of the domestic goods and services it can buy and in terms of the Chinese currency it can buy. b. gains value in terms of the domestic goods and services it can buy, but loses value in terms of the Chinese currency it can buy. c. loses value in terms of the domestic goods and services it can buy, but gains value in terms of the Chinese currency it can buy. d. loses value both in terms of the domestic goods and services it can buy and in terms of the Chinese currency it can buy.