Ceteris Paribus, If the Price Level Increases by 20 Percent

question 35

Multiple Choice

Ceteris paribus, if the price level increases by 20 percent,

• A)both the nominal demand for money and demand for real balances increases by 20 percent.
• B)the nominal demand for money decreases by 20 percent and the demand for real balances decreases.
• C)the nominal demand for money increases by 20 percent and the demand for real balances remains the same.
• D)both the nominal demand for money and the demand for real balances remains the same.