An Increase in Real GDP Will Shift the Money Demand

question 3

Multiple Choice

An increase in real GDP will shift the money demand curve to the ________,causing the nominal interest rate to ________.

• A) right; increase
• B) right; decrease
• C) left; increase
• D) left; decrease

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Definitions:

Sum

The result of adding two or more numbers or quantities.

Binomial Theorem

A fundamental theorem in algebra that describes the algebraic expansion of powers of a binomial. According to the theorem, it's possible to expand the polynomial u200b\( (a + b)^n \)u200b into a sum involving terms of the form u200b\( a^k b^{n-k} \)u200b.

Expand

In mathematics, to rewrite an expression or equation in an extended form by distributing or multiplying out brackets.

Pascal's Triangle

A triangular array of numbers in which the edges are 1's, and each interior number is the sum of the two numbers directly above it.