Answer to Question #235944 in Macroeconomics for Priest

Question

The demand curve for money will shift to the left if: 

I. Real GDP increases. 

II. Real GDP decreases. 

III. The interest rate increases. 

IV. The interest rate decreases.

A. Only (II) is correct.

B. (II) and (III) are correct.

C. (I) and (IV) are correct.

D. (II) and (IV) are correct.

Answer 1

B.(II) and (III) are correct. The demand curve for money shifts to the left because the interest rate increases and the Gross Domestic Product decreases.