Consider the Demand for Money

question 5

Multiple Choice

Consider the demand for money.If real GDP falls,other things being equal,we can expect

• A)an increase in the speculative demand for money.
• B)an increase in the total demand for money.
• C)a decrease in transactions demand for money.
• D)an increase in transactions demand for money.
• E)an increase in precautionary demand for money.

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Definitions:

GDP Deflator

An economic measure that accounts for inflation by converting output measured at current prices into constant-dollar GDP.

Net Domestic Product

A measure of a nation's total economic output, adjusted for depreciation; it is the gross domestic product (GDP) minus the depreciation on a country’s capital goods.

National Income

The total amount of money earned within a country from the production of goods and services over a specified period, usually a year.

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar GDP, stripping out the effects of inflation.