An increase in real GDP affects the demand for money because
A) tax payments rise because more income is earned.
B) there is an inverse relationship between the quantity money demanded and nominal GDP.
C) at the higher price level, it takes more dollars to make expenditures.
D) when real GDP increases, more money is needed to make expenditures.
E) the larger real GDP, the higher the real interest rate.
D
Economics
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If the Fed fears a recession, it
A) decreases aggregate supply. B) buys government securities. C) sells government securities. D) decreases the quantity of money. E) decreases aggregate demand.
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Menu costs will:
A. Increase the amount of training of workers B. Result in price wars between businesses C. Increase the legal minimum wage D. Make prices inflexible downward
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