The Money Demand Curve Slopes

question 147

Multiple Choice

The money demand curve slopes:

• A)downward because the cost of holding money decreases as the interest rate decreases.
• B)downward because the cost of holding money increases as the interest rate decreases.
• C)upward because people demand more money as real GDP increases.
• D)upward because people demand more money as real GDP decreases.
• E)downward because people demand more money as the price level decreases.

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Definitions:

Resulting Events

Outcomes or occurrences that follow from specific actions or conditions.

Associative Learning

The process of learning in which a connection between two stimuli or between a stimulus and a response is learned.

Continuous Reinforcement

A learning process in which a behavior is reinforced every time it occurs, leading to faster acquisition of the behavior.

Respondent Behavior

A type of reaction to stimuli that is automatic or reflexive, such as salivating when smelling food.