The demand for money will fall if
ECONOMICS
JAMB 2023
The demand for money will fall if
- A. People expect deflation soon
- B. Real GDP rises
- C. Real interest rates rise
- D. The GDP deflator rises
Correct Answer: C. Real interest rates rise
Explanation
If GDP falls, then people demand less money for transactions. As interest rate rise (fall), the demand for money will fall(rise).
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