What Are the Effects of an Increase in the Price

question 249

Multiple Choice

What are the effects of an increase in the price level?

• A) People hold less money, so they lend less, and the interest rate rises.
• B) People hold less money, so they lend more, and the interest rate falls.
• C) People hold more money, so they lend more, and the interest rate falls.
• D) People hold more money, so they lend less, and the interest rate rises.

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Definitions:

Greatest Good

A principle often associated with utilitarian ethics, emphasizing the action that results in the most benefit or happiness for the greatest number of people.

Cost-benefit Analysis

A systematic approach to estimate the strengths and weaknesses of alternatives, used to determine the best option in terms of benefits outweighing costs.

Duty-based Ethics

An ethical theory that emphasizes duties or moral rules as the basis for judging the ethicality of actions.

Corporate Social Responsibility

A business approach that involves participating in initiatives that benefit society, including ethical, environmental, and philanthropic efforts.