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When the Price Level Rises and Increases the Demand for Money

question 20

Multiple Choice

When the price level rises and increases the demand for money, the nominal interest rate ________ and the real interest rate ________.


Definitions:

Merchandise

Goods or products that are bought and sold in retail or wholesale in the business.

Sales Discounts

Reductions in the selling price offered to customers, often as an incentive to encourage prompt payment.

Cash Discount

A deduction from the total amount on an invoice allowed by a vendor to encourage prompt payment.

Accounts Receivable

The money owed to a business by its clients for goods or services delivered but not yet paid for.

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