The Aggregate Real Money Demand Schedule L(R,Y)

question 62

Multiple Choice

The aggregate real money demand schedule L(R,Y)

• A) slopes upward because a fall in the interest rate raises the desired real money holdings of each household and firm in the economy.
• B) slopes downward because a fall in the interest rate reduces the desired real money holdings of each household and firm in the economy.
• C) has a zero slope because a fall in the interest rate keeps constant the desired real money holdings of each household and firm in the economy.
• D) slopes downward because a fall in the interest rate raises the desired real money holdings of each household and firm in the economy.
• E) slopes downward because a rise in the interest rate makes consumers less focused on the liquidity of their assets.

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