can anyone answer and if possible explain why choose the answer. e.g. 1) D becau
ID: 1110862 • Letter: C
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can anyone answer and if possible explain why choose the answer.
e.g. 1) D because.........
Refer to the information provided in Figure 25.2 below to answer the question(s) that follow. 7% 100 150 200 300 Money ($ million) Figure 25.2 37. Refer to Figure demand could be caused by 2.2. Suppose money demand is currently at Point A. An increase money A) an increase in the interest rate. B) an increase in nominal income C) a decrease in the interest rate D) a decrease in nominal income. o Figure 25.2. Suppose money demand is currently at Point A. A decrease in the interest rate to 5%, ceteris paribus, will likely A) de crease the quantity of money demanded from $200 million to $100 million. B) increase the quantity of money demanded from $100 million to $200 million C) increase the quantity of money demanded from $100 million to $150 million. ) increase the quantity of money demanded from $150 million to $300 million. 39. Refer to Figure 25.2. Suppose the money demand is currently at Point D. A movement to point C could be caused by A) a decrease in the interest rate. B) a decrease in nominal income. C) an increase in the interest rate. D) an increase in the price level. 40. Refer to Figure 25.2. Suppose that money demand is currently at Point B. A movement to Point D could be caused by A) an increase in nominal income, ceteris paribus. B) an increase in the price level, ceteris paribus C) a decrease in the price level, ceteris paribus D) a decrease in the interest rate, ceteris paribus.Explanation / Answer
37. ) THe answer is B ) an increase in nominal income.
because an increase in nominal income will directly shift the money demand to right.indicating the increase in demand. and we know that money demand has a positive relation with nominal output or nominal income.
38) THe answer is C-) increase the quantity of money demanded form $100 million to $150 million.
because , when there is a change in interest rate, a movement along the money demand curve is happen. at lower interest , money demand is increase and vice-versa.
39) The answer is B-) a decrease in nominal income.
because when there is a leftward shift of demand curve, then the demand for money has been decrease due to which there is aleftward shift in money demand curve.
40) The answer is D-) A decrease in the interest rate. ceteris paribus.
because , the interest rate and money demand has a negative relation to each other. because when the interest rate is high, people will less hold money in cash and thus invest them and when the interest is less, they likely to hold money in cash, and thus money demand increases.
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