Which of the Following Is False

question 12

Multiple Choice

Which of the following is false?

• A)My real income rises 10 percent; therefore, my demand for real money balances will also rise 10 percent.
• B)The nominal money supply and the price level have both risen by 10 percent; therefore, the supply of real money balances is unchanged.
• C)The demand for money is really a demand for real money balances, M/P.
• D)Ceteris paribus, the quantity demanded of real money balances is inversely related to the interest rate.

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Definitions:

Living Costs

The necessary expenses that individuals incur in order to maintain a standard of living, including housing, food, taxes, and healthcare.

Expected Gains

Anticipated benefits or profits that are expected from an investment, project, or decision.

Total Wage Bill

The total amount of money paid by an employer to its employees as wages.

Domestic Output

The total value of all goods and services produced within the borders of a nation over a specific period of time.