The money demand curve shifts to the right, as people demand more money for transactions purposes. According to graph 1.1, the demand for money will increase during the festive (Christmas) season.
MD would shift right, MS would remain unchanged and nominal int rates would rise
During the Christmas shopping season, the demand for money increases significantly. To offset the increase in money demand, the Fed must increase the money supply, which will put downward pressure on nominal interest rates.
During the Christmas shopping season, the demand for money increases significantly. If the Fed takes no actions to offset the increase in money demand, then nominal interest rates will:
increase.