Which of the Following Is CORRECT? the Demand for Money

question 406

Multiple Choice

Which of the following is CORRECT? The demand for money

• A) increases as real GDP increases.
• B) decreases as the price level increases.
• C) depends on the quantity of money.
• D) increases when the nominal interest rate rises.

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Definitions:

Excess Reserves

The amount of reserves held by a bank that exceeds the minimum reserve requirements set by the central bank.

Ability

Ability refers to the capacity or power of an individual or entity to do something effectively, often implying a skill or competence in a specific domain.

Currency

A system of money in general use in a specific country or region.

Loans

Financial agreements wherein a lender gives money or assets to a borrower, and the borrower agrees to return the property or repay the borrowed money, usually along with interest, at a future point in time.