If Real GDP Stays the Same but the Price Level

question 20

Multiple Choice

If real GDP stays the same but the price level increases:

• A) nominal money demand should remain the same.
• B) nominal money demand should decrease.
• C) nominal money demand should increase.
• D) real money demand should decrease.

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Definitions:

Somatic Nervous

A component of the peripheral nervous system associated with the voluntary control of body movements via skeletal muscles.

Central Nervous System

The part of the nervous system that includes the brain and spinal cord, responsible for processing and sending out nerve signals.

Somatic Nervous System

A part of the peripheral nervous system responsible for voluntary movements of muscles and the reception of external stimuli.

Autonomic Nervous System

The part of the nervous system that controls involuntary bodily functions, including heart rate, digestion, and respiratory rate, consisting of the sympathetic and parasympathetic divisions.