How Is the Money Demand Curve Affected When Price Level

question 42

Multiple Choice

How is the money demand curve affected when price level increases?  

• A) The money demand curve shifts to the right. 
• B) The money demand shifts curve to the left. 
• C) The money demand curve is NOT affected. 
• D) The slope of the money demand curve changes.

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Definitions:

Crude Oil

A naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials, used as a fuel source.

Price-Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage.

Perfectly Inelastic

A situation where the quantity demanded or supplied does not change in response to a price change.