The quantity of money demanded is
A) the total currency in circulation.
B) the same as the money supply.
C) equal to real GDP.
D) the money that people choose to hold.
E) changes only when real GDP changes.

Question

Quizplus · Accepted Answer

The quantity of money demanded refers to the amount of money that individuals and households prefer to hold at any given time. It is not the same as the money supply as it is a form of demand for money, rather than the actual supply of money in an economy. The quantity of money demanded can change depending on factors such as interest rates, inflation, and economic instability, and does not necessarily correspond directly to real GDP.

The Quantity of Money Demanded Is