How does an increase in income levels typically affect nominal interest rates in the money market?

When income levels in an economy increase, people generally have more money to spend. This leads to a higher demand for goods and services, which can create more demand for money itself, as people need cash to make purchases. As demand for money rises, banks may respond by increasing nominal interest rates to balance the supply and demand in the money market. For example, if a person's income rises and they want to buy a new car, they might need to take out a loan, which would increase the overall demand for money. So, as income goes up, it often results in higher interest rates because more people are looking to borrow money.