A Reason Why an Increase in the Price Level Decreases

question 262

Multiple Choice

A reason why an increase in the price level decreases the quantity of real GDP demanded is that

• A)the buying power of money increases.
• B)the real interest rate falls.
• C)the price of domestic goods and services increases relative to foreign goods and services.
• D)the inflation rate decreases.
• E)potential GDP decreases.

Comprehend the BAT and Miller-Orr models for managing cash balances.

Define and explain the use of money market instruments in liquidity management.

Understand the functions and benefits of concentration accounts, lockboxes, and zero-balance accounts in cash management.

Recognize the role of smart cards and other electronic methods in managing cash.