Question 1
When the aggregate price level (
P) is multiplied by real aggregate income (
Y), the result is
◦ the aggregate money multiplier.
◦ the real aggregate price level.
◦ nominal income.
◦ aggregate money demand.
Question 2
The demand for money and the interest rate are
◦ positively related.
◦ negatively related.
◦ sometimes positively related and other times negatively related, depending on the condition of the economy.
◦ not related.