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through inflation as nominal GDP does not account for it

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Q: What are the causes through which nominal GDP had doubled overnight?
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An increase in nominal GDP increases the demand for money because?

An increase in nominal GDP impacts the demand for money in different ways. It causes the need for money to increase as more US products are sold to different countries, the US dollar value increases on importing goods from other countries. More money is needed in circulation because more goods can be bought with the US dollar from other countries as it has more value than the currency of other countries in which we are importing from.


What is the meaning Stimulus?

A stimulus causes an action or response, like the ringing of your alarm clock if you didn't sleep through it.


Why do governments devalue their currency?

Governments devalue their currency to make debt repayment less costly. Devaluation causes inflation which hurts the value of existing bonds including Government Bonds (e.g. USA Government Treasury Bills). So the government pays back debt in dollars that are worth less. Also, the inflation increases nominal tax revenue that hurts the nation's comsumers as savings is destructed.


Why does aggregate demand go up when money supply increases?

It doesn't. Money supply has no effect on aggregate demand. Aggregate demand is only effected by the buying power of money, real interest rate, and the real prices of exports and imports. If the supply of money goes up it only causes a short term decrease in the nominal interest rate. The price level is not accompanied by a decrease in the supply of money so the real interest rate does not rise.


What causes exchange rate fluctuations?

what are the causes of fluctuations in the exchange rate

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