An Increase in Real GDP Affects the Demand for Money

question 47

Multiple Choice

An increase in real GDP affects the demand for money because

• A) when real GDP increases, more money is needed to make expenditures.
• B) at the higher price level, it takes more dollars to make expenditures.
• C) tax payments rise because more income is earned.
• D) there is an inverse relationship between the quantity money demanded and nominal GDP.
• E) the larger real GDP, the higher the real interest rate.

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Definitions:

Maladaptive Interpretations

Patterns of thinking or interpreting information and experiences in a way that is counterproductive or harmful to one's mental health.

Conversion Disorder

A mental health condition where a person has physical symptoms (such as paralysis, blindness) without a physiological cause, believed to stem from psychological conflict.

Glove Anesthesia

A psychological condition where a person experiences numbness in the hand and fingers that mimics the area covered by a glove, often without physical cause and associated with conversion disorders.

Illness Anxiety Disorder

A form of anxiety characterized by a preoccupation with fears of having a serious medical condition.