CFA Practice Question

There are 341 practice questions for this study session.

CFA Practice Question

Which of the following will increase the demand for money?
A. A fall in the price level or a decrease in the inflation rate
B. An increase in real output
C. An increase in the interest rate
Explanation: As output increases and, thus, incomes increase, individuals will wish to make more purchases, and money demand increases.

User Contributed Comments 2

User Comment
cbb1 Demand for money determined by 1) Nominal GDP 2) returns on other financial instruments.
achu Remember , income and expenditures directly related. Greater GDP means greater income in people's pockets.
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