Which of the Following Would Cause the Money Demand Curve

question 61

Multiple Choice

Which of the following would cause the money demand curve to shift to the left?

• A)an open market purchase of Treasury securities by the Federal Reserve
• B)an increase in the interest rate
• C)an increase in the price level
• D)a decrease in real GDP

---

Definitions:

Appreciate

To increase in value or price over time.

Fix Exchange Rate

A government or central bank policy of setting the exchange rate of a currency relative to other currencies.

Dollar-Yen Foreign Exchange

The exchange rate between the U.S. dollar and the Japanese yen, indicating how much yen can be exchanged for one U.S. dollar in the foreign exchange markets.

Trade Deficit

An economic condition that occurs when a country imports more goods and services than it exports.