An Increase in the Price Level Will Result in A(n)________

question 24

Multiple Choice

An increase in the price level will result in a(n) ________ in the demand for money and cause the nominal interest rate to ________.

• A) decrease; decrease
• B) decrease; increase
• C) increase; decrease
• D) increase; increase

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Definitions:

Simplify

The process of reducing an expression into its simplest form, making it easier to work with.

Simplify

To make something less complex or complicated, making it easier to understand or solve.

Radical

Refers to the root of a number, with the most common being the square root, though it can refer to cube roots or higher.

Square Root

A number which produces a specified quantity when multiplied by itself.