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3 years ago

Higher nominal interest rates the amount of money demanded and higher real income the amount of money demanded.

Business

1 answer:

Ulleksa [173]3 years ago

3 0

Answer:

decreases

increases

Explanation:

Nominal interest rate is real interest rate plus inflation rate. If nominal interest rate rises, people would prefer to save their money and so the demand for money would fall.

Real income is income adjusted for price level changes. The higher the real income,the higher the purchasing power, the higher the demand for money.

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Higher nominal interest rates ______ the amount of money demanded and higher real income ______ the amount of money demanded.

Higher nominal interest rates the amount of money demanded and higher real income the amount of money demanded.