The Reason Why Individuals Have More Money Demand When Their

question 44

Multiple Choice

The reason why individuals have more money demand when their inflation expectations increase is because:

• A) they need to find another job when prices go up so that they could buy the same goods and services.
• B) they need more money in their pockets when prices go up so that they could buy the same goods and services.
• C) they need a higher wage when prices go up so that they could buy the same goods and services.
• D) they need less money in their pockets when prices go up so that they could buy the same goods and services.

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Definitions:

Normal Distribution

Refers to a probability distribution that is symmetric around the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Z-score

A statistical measurement that describes a value's relationship to the mean of a group of values, normalized to standard deviation units.

Normal Random Variable

A variable that follows a normal distribution, characterized by its mean and standard deviation, representing outcomes with a probabilistic nature.

Standard Deviation

An assessment of the extent to which values in a set are dispersed or varied from the mean, highlighting the differences from the average.