Suppose That the Price Level Does Not Change While Real

question 108

Multiple Choice

Suppose that the price level does not change while real GDP decreases. As a result,

• A) the demand for money increases and the demand for money curve shifts rightward.
• B) the supply of money curve shifts leftward.
• C) the supply of money curve shifts rightward.
• D) the quantity of money demanded decreases and there is a movement downward along the demand for money curve.
• E) the demand for money decreases so that households and firms hold smaller amounts of money.

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Definitions:

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