An advantage of using the realmoney demand function is that it is unaffected by changes in
A)geographical location.
B)ruling political power.
C)prices of goods and services.
D)income of consumers.

Question

An advantage of using the real­money demand function is that​ it is unaffected by changes in
A)geographical location.
B)​ruling political power.
C)​prices of goods and services.
D)​income of consumers.

Quizplus · Accepted Answer

The real-money demand function is based on the purchasing power of money, which is influenced by prices of goods and services. Therefore, it is unaffected by changes in prices of goods and services themselves. Changes in geographical location, ruling political power, and income of consumers may impact the real-money demand function.

An Advantage of Using the Real­money Demand Function Is That​

An Advantage of Using the Realmoney Demand Function Is That