If real income rises 4%, prices rise 1%, and nominal money demand rises 4%, what is the income elasticity of real money demand?
(a) 3/4
(b) 4/5
(c) 5/6
(d) 1
Answer: A
If real income rises 4%, prices rise 1%, and nominal money demand rises 4%, what is the income elasticity of real money demand?
(a) 3/4
(b) 4/5
(c) 5/6
(d) 1
Answer: A
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