Homework Answers
1 - Option D
The nominal GDP increases
This will increase the demand for money. The other options will shift the demand curve to the left.
2 - Option B
When nominal GDP decreases
The decrease in the nominal GDP will shift the demand for the money to left
3 - Option C.
The transaction demand for money is downward sloping because the demand for money varies inversely with the interest rates
The other alternatives are wrong
4 - Option C
Supply of money curve and total demand for money curve
This helps to obtain the equlibrium level of interest rates.
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