The Demand for Money Increases and the Demand for Money

question 28

Multiple Choice

The demand for money increases and the demand for money curve shifts rightward if

• A)the real interest rate increase.
• B)the nominal interest rate increases.
• C)the inflation rate increases.
• D)real GDP decreases.
• E)the price level increases.

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Definitions:

Recognition

The cognitive process of identifying previously encountered information from an array of options.

Primacy Effect

A cognitive bias that results in a person remembering information from the beginning of a list better than information presented later.

Phi Phenomenon

The visual trick of seeing ongoing movement in distinct items observed quickly one after the other.

Recency Effect

The tendency to remember the most recently presented information best, which can affect how memories are retrieved.