Author Question: The reason that people may not want to hold money is A) the precautionary demand for money and ... (Read 60 times)

karen · **on:** Jun 29, 2018

The reason that people may not want to hold money is

A) the precautionary demand for money and the risk of being robbed.
B) the opportunity cost.
C) the transactions demand makes it unnecessary.
D) due to the direct relationship between money demand and the interest rate.

Question 2

In the classical model, what happens to the level of real GDP if aggregate demand increases?

A) Real GDP increases.
B) Real GDP decreases.
C) Real GDP would increase at first, then decrease.
D) Real GDP would remain the same, at equilibrium.