Question

Real money demand curve in the space of R (Y-axis) and M/P: 3) _______ A) slopes upward because a fall in the interest rate raises the desired real money holdings of each household and firm in the economy. B) slopes downward because a fall in the interest rate reduces the desired real money holdings of each household and firm in the economy. C) has a zero slope because a fall in the interest rate keeps constant the desired real money holdings of each household and firm in the economy. D) slopes downward because a fall in the interest rate raises the desired real money holdings of each household and firm in the economy. E) slopes downward because a rise in the interest rate makes consumers less focusedon the liquidity of their assets.

Answer 1

Answer:

The correct answer is :

D) slopes downward because a fall in the interest rate raises the desired real money holdings of each household and firm in the economy.

Explanation:

Remember that the 3 main factors to determine it are: real national income, interest rate, and the price level. This concepts refers to an economic measurement for all finished goods and services produced in an economy.  It is the total amount of money exchanged for those ones at a specific price level.