When real GDP increases, people demand
A) the same quantity of real money.
B) less real money.
C) more real money.
D) more money in nominal terms but less in real terms.

Question

Quizplus · Accepted Answer

When real GDP increases, it typically means the economy is growing, and as a result, people and businesses are likely to demand more goods and services. To facilitate this increased level of economic activity, they will need more real money to conduct transactions, leading to an increased demand for real money.

When Real GDP Increases, People Demand