In the Money Market, If the Price Level Rises, Then

question 108

Multiple Choice

In the money market, if the price level rises, then the demand for money_{--------------------} equilibrium nominal interest rate _{--------------------}.

• A)decreases; falls
• B)increases; rises
• C)increases; falls
• D)increases; does not change
• E)decreases; rises

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Definitions:

Demand-oriented

A strategy or approach focused on meeting the needs and desires of consumers to drive product development and marketing efforts.

Expected Customer Tastes

Anticipations or predictions about the preferences and desires of customers in relation to products or services in the future.

Price Level

Denotes the average of current prices across the entire spectrum of goods and services produced in the economy.

Skimming Pricing

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product.