-In the above figure, suppose the economy is initially on the demand for money curve MD₁. What is the effect of an increase in financial innovation such as the introduction of ATMs? A) There would be a movement upward along the demand for money curve MD₁. B) The demand for money curve would shift rightward to MD₂. C) There would be a movement downward along the demand for money curve MD₁. D) The demand for money curve would shift leftward to MD₀.

Question

Quizplus · Accepted Answer

Financial innovation like ATMs reduces the need to hold cash, shifting the demand for money curve leftward.

-In the Above Figure, Suppose the Economy Is Initially on the Demand