The money demand curve shows the relationship between the and the of money deman

Question

The money demand curve shows the relationship between the and the of money demanded money supply; quantity aggregate price level; nominal quantity interest rate; nominal quantity real GDP; nominal quantity An increase in the demand for money would result from a(n): decrease in nominal GDP. decrease in real GDP. decrease in the price level, increase in the price level. The fact that many stores in the United States have found it economical to accept credit cards has: increased the demand for money, decreased the demand for money. increased the demand for credit card transactions but has not affected the demand for money. decreased the demand for credit card transactions but has not affected the demand for money. According to the liquidity preference model, the equilibrium interest rate is determined by: the supply of and demand for loanable funds, the supply of and demand for money, the level of investment spending and saving, the International Monetary Fund. In September 2007, reversing its course, the Federal Reserve began a series of: interest rate increases, reversing its previous policy of lowering interest rates to fight the financial crisis. interest rate increases to combat inflation. cuts in the reserve requirements, reversing its previous policy of increasing the reserve requirement, to stop bank failures. cuts in the federal funds target rate to lower the interest rate, reversing its previous policy of raising interest rates, to fight the financial crisis.

Explanation / Answer

(28) (C)

Money demand curve shows how much of nominal money will be demanded at every level of interest rate.

(29) (B)

Lower price levl will increase real GDP, which raises aggregate demand, and increases the demand for money.

(30) (C)

Credit card transactions have increased but demand for money is not affected by only this event since credit cards don't represent money.

(31) (B)

Interest rate and quantity of money is determined by intersection of demand for money & supply of money.

(32) (D)

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