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The demand for money will fall if

Economics
JAMB 2023

The demand for money will fall if

  • A. People expect deflation soon
  • B. Real GDP rises
  • C. Real interest rates rise
  • D. The GDP deflator rises
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Correct Answer: Option C
Explanation

If GDP falls, then people demand less money for transactions. As interest rate rise (fall), the demand for money will fall(rise).

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