Subject - Economics:

Macroeconomics

MCQ - 56-4066

Question:

When nominal GDP is rising, we would expect money demand to

increase as consumers demand more money as a financial asset, increasing the interest rate.
increase as consumers demand more money for transactions, increasing the interest rate.
decrease as the purchasing power of the dollar is falling, decreasing the interest rate.
increase as consumers demand more money for transactions, increasing the interest rate.
increase as consumers demand more money as a financial asset, decreasing the interest rate.

Correct Answer: B

Explanation:

The transaction demand for money rises with higher levels of nominal GDP. With a fixed supply of money, increased demand for money increases the interest rate as consumers sell financial assets (e.g., bonds), lowering the bond price and increasing the interest rate.

Previous Question

Next Question

Back to Section

Record Performance

269 MCQ for effective preparation of the test of Macroeconomics of Economics section.

Read the MCQ statement: When nominal GDP is rising, we would expect money demand to , keenly and apply the method you have learn through the video lessons for Macroeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 56-4066.

How to Answer

Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

Share This Page

Full Films

TV Serials

Short Films

Upcoming Films