In the Medium Run, an Increase in Inflation Causes

question 56

Multiple Choice

In the medium run, an increase in inflation causes:

• A) no change in the opportunity cost of holding money.
• B) an increase in the opportunity cost of holding money.
• C) individuals to switch from holding bonds to money and increase their real money balances.
• D) a decrease in the opportunity cost of holding money.
• E) real interest rates to decrease.

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