If the General Price Level Were to Increase,other Things Being

question 44

Multiple Choice

If the general price level were to increase,other things being equal,the money demand function would

• A)not be affected.
• B)shift to the left.
• C)shift to the right.
• D)shift,but the direction of the shift cannot be predicted.
• E)become steeper but not shift.

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Definitions:

Government Subsidy

Financial assistance given by the government to individuals, businesses, or institutions to support or encourage certain economic activities.

Supply

The total amount of a good or service available for purchase at any given price level, within a specified period.

Law of Demand

A fundamental economic principle stating that as the price of a product decreases, demand for it usually increases, and vice versa.

Surpluses

Situations in which the quantity of a good or service supplied exceeds the quantity demanded at the current price.