An Increase in the Price Level Leads to ________ in the Demand

question 184

Multiple Choice

An increase in the price level leads to ________ in the demand for money and an increase in real GDP leads to ________ in the demand for money.

• A) an increase; an increase
• B) an increase; a decrease
• C) an decrease; a increase
• D) a decrease; a decrease
• E) no change; an increase

---

Definitions:

Real GDP

The measure of a country's economic output adjusted for price changes or inflation.

Money Market Mutual Funds

Investment funds that pool money from investors to purchase short-term, high-quality debt securities.

Hedge Funds

Investment funds that employ various strategies to earn returns for their investors, often engaging in more complex and higher-risk trades.

Fed's Scope

Refers to the range of activities and responsibilities undertaken by the Federal Reserve, including monetary policy, bank regulation, and financial system stability.