Suppose That Y = 4,000 and We Are at a Point

question 99

Multiple Choice

Suppose that Y = 4,000 and we are at a point on the money demand schedule where (M/P) = 600.Should Y fall to 3,900,the same quantity of real money balances

• A)will not be demanded under any conditions.
• B)will be demanded again provided the interest rate does not change.
• C)will be demanded again provided the interest rate rises by a certain amount.
• D)will be demanded again provided the interest rate falls by a certain amount.

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