The traditional money demand function implies thatGroup of answer choicesa change in the expected future level of interest rates will leave the function unaffecteda fall in the current rate of interest will lead to a rightward shift of the functiona fall in the rate of interest and a fall in the real level of income would necessarily increase the demand for real money balancesa rise in the rate of interest and a fall in the real level of income would necessarily decrease the demand for real money balances.

The traditional money demand function implies that:

1. A change in the expected future level of interest rates will leave the function unaffected: This is because the traditional money demand function is primarily concerned with the current level of interest rates, not future expectations.

2. A fall in the current rate of interest will lead to a rightward shift of the function: This is because lower interest rates make holding money more attractive (since the opportunity cost of holding money, i.e., the interest foregone by not investing it, is lower), which increases the demand for money.

3. A fall in the rate of interest and a fall in the real level of income would necessarily increase the demand for real money balances: This is not necessarily true. While a fall in the rate of interest would increase the demand for money (as explained above), a fall in real income would decrease the demand for money (since people have less income to hold as money).

4. A rise in the rate of interest and a fall in the real level of income would necessarily decrease the demand for real money balances: This is likely to be true. A rise in the rate of interest would decrease the demand for money (since the opportunity cost of holding money is higher), and a fall in real income would also decrease the demand for money (since people have less income to hold as money).

The traditional money demand function implies that:

1. A change in the expected future level of interest rates will leave the function unaffected: This is because the traditional money demand function is primarily concerned with the current level of interest rates, not future expectations.

2. A fall in the current rate of interest will lead to a rightward shift of the function: This is because lower interest rates make holding money more attractive (since the opportunity cost of holding money, i.e., the interest foregone by not lending it out, is lower), which increases the demand for money.

3. A fall in the rate of interest and a fall in the real level of income would necessarily increase the demand for real money balances: This is not necessarily true. While a fall in the interest rate would increase the demand for money (as explained above), a fall in real income would decrease the demand for money (since people have less income to hold as money).

4. A rise in the rate of interest and a fall in the real level of income would necessarily decrease the demand for real money balances: This is likely true. A rise in the interest rate would decrease the demand for money (since the opportunity cost of holding money is higher), and a fall in real income would also decrease the demand for money (since people have less income to hold as money).