A function that summarizes the relationship between the real demand for money, real income, and the nominal interest rate is called the ____function.
A)real money-demand
B)nominal money-demand
C)interest-income
D)real income-demand

Question

Quizplus · Accepted Answer

The function that summarizes the relationship between the real demand for money, real income, and the nominal interest rate is the real money-demand function. This function shows how much real money individuals want to hold at various levels of real income and nominal interest rates. The real money-demand function is based on the idea that people hold money as a store of value and as a medium of exchange, and that the demand for money is influenced by changes in real income and nominal interest rates.

A Function That Summarizes the Relationship Between the Real Demand