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    Hey, I would like someone to help me answer this question please.

    If in country X real GDP decreases and simultaneously the price level rises then...

    (A) The Demand for real money curve remains unchanged
    (B) It is unclear what direction (if at all) the demand for real money will shift
    (C) The demand for real money curve shifts to the left
    (D) The demand for real money curve shifts to the right

    Many Thanks
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    (Original post by A_Howells)
    Hey, I would like someone to help me answer this question please.

    If in country X real GDP decreases and simultaneously the price level rises then...

    (A) The Demand for real money curve remains unchanged
    (B) It is unclear what direction (if at all) the demand for real money will shift
    (C) The demand for real money curve shifts to the left
    (D) The demand for real money curve shifts to the right

    Many Thanks
    I think it's C, a decrease in real GDP shifts the curve to the left, and the rise in price level merely moves 'along the curve'.

    Feel free to dispute this.
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    (Original post by tehforum)
    I think it's C, a decrease in real GDP shifts the curve to the left, and the rise in price level merely moves 'along the curve'.

    Feel free to dispute this.
    I would dispute if I knew what I was talking about

    I thought it could be B, but I have no way of figuring that our haha. I did consider B, as if things got more expensive (rise in price) than people would require more real money to consume the same amount of goods before the price rose.

    It it was one of my questions in last semesters test and I never found out the answer haha.
 
 
 
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