If the Price Level Increases, the

question 92

Multiple Choice

If the price level increases, the

• A) demand for money does not change and the quantity of money demanded does not change.
• B) demand for money increases.
• C) quantity of money demanded increases.
• D) demand for money decreases.
• E) quantity of money demanded decreases.

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Definitions:

Expectation

The anticipation or belief regarding the future performance of the economy, markets, or individual financial assets.

CDs

Certificates of Deposit, a financial product offered by banks that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period.

Price Increase

A rise in the cost of goods or services.

Complements

Goods, such as Pepsi and pizza, that relate in such a way that an increase in the price of one shifts the demand for the other leftward.