AP Macroeconomics 4.5 Money Market Shifts
Explain how price-level changes and monetary policy shift money demand or supply and change the equilibrium nominal interest rate.
- Syllabus
- Effective Fall 2025
- Course
- AP Macroeconomics
Explain how price-level changes and monetary policy shift money demand or supply and change the equilibrium nominal interest rate.
The table provided shows economic data for the country of Louland. The base year is year 1, and the GDP deflator in year 2 is 115.

How would the change in real GDP from year 1 to year 2 affect the demand for money and the nominal interest rate in Louland?
State that the demand for money would increase and the nominal interest rate would
increase.
1 point