Approximately, the real interest rate ________ the inflation rate ________ the nominal interest rate

The relationship between the quantity of real balances demanded and the rate of interest (called the demand for money curve) will ____ when GDP increases because _____.

A) increase (shift right); more transactions balances are needed to make purchases and to hold between pay periods B) increase (shift right); more asset balances are needed for saving or precautionary reasons C) decrease (shift left); fewer transactions balances are needed to make purchases and to hold between pay periods D) decrease (shift left); lower asset balances are needed for saving or precautionary reasons

The aggregate expenditure in an open economy is defined as:

A) E = C + I + G. B) E = C + I + G + X. C) E = C × I × G × X - M. D) E = C + I + G + X - M.