If the Price Level Falls, the

question 23

Multiple Choice

If the price level falls, the

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

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Definitions:

Market Price

The market value at which a service or asset is currently traded.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a specified quantity of an asset at a set price within a specified time.

Strike Price

The rate at which an option's owner has the right to purchase (for a call option) or offload (for a put option) the underlying asset or commodity.

Market Price

The current price at which an asset or service can be bought or sold.