An Increase in Nominal GDP Increases the Demand for Money

question 10

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:

Presidential Veto

The power of the President to reject a bill passed by Congress, preventing it from becoming law unless overridden.

Emergency Declaration

An emergency declaration is a formal announcement by a government authority that enables temporary measures to manage a significant threat or disaster, often unlocking additional resources and powers.

Foreign Threats

Challenges or dangers originating from outside a country's borders that can impact national security or interests.

Embargo Trade

A governmental ban on trade with a specific country or the exchange of specific goods, often used as a political tool.