Question

Other things equal, if there is an increase in nominal GDP, bond prices will rise. the interest rate will rise. consumption spending will fall. the demand for money will decrease.

Answer 1

the interest rate will rise

Step-by-step explanation:

For the nominal GDP to increase, the money supply must have increased. This will lead to a higher inflation rate, which will rise the interest rate. Since the interest rate increased, the price of bonds will decrease. Since the money supply increased, private consumption will increase.