An Increase in Nominal GDP Increases the Demand for Money

question 393

Multiple Choice

An increase in nominal GDP increases the demand for money because

• A) interest rates will rise.
• B) more money is needed to finance a larger volume of transactions.
• C) bond prices will fall.
• D) the opportunity cost of holding money will decline.

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Definitions:

Power Distance

A cultural dimension that describes the extent to which individuals in a society accept that power is distributed unequally.

High-Power-Distance Cultures

Cultures in which there is a great deal of acceptance and expectation of unequal power distribution among people, institutions, and organizations.

Rank

The position or level of importance within a hierarchy or organization.

Market-Entry Strategies

The planned methods of delivering goods or services to a new target market and establishing a presence in that market.