An Increase in Money Demand Causes the Real Interest Rate

question 52

Multiple Choice

An increase in money demand causes the real interest rate to ________ and output to ________ in the short run,before prices adjust to restore equilibrium.

• A)rise;rise
• B)rise;fall
• C)fall;rise
• D)fall;fall

---

Definitions:

Leptin

A hormone produced by adipose (fat) cells that helps to regulate energy balance by inhibiting hunger, thereby influencing body weight.

Fat Cells

Fat cells, or adipocytes, are cells in the body that store fat and play crucial roles in energy storage, insulation, and regulation of body temperature.

Hormone

Chemical messengers produced by glands in the endocrine system, influencing various physiological processes throughout the body.

Extrinsic Motivation

A type of motivation that is driven by external rewards, such as money, fame, grades, and praise, rather than by the intrinsic pleasure or satisfaction derived from the activity itself.