Other Things the Same,a Decrease in the Price Level Induces

question 164

Multiple Choice

Other things the same,a decrease in the price level induces people to hold

• A)less money,so they lend less,and the interest rate rises.
• B)less money,so they lend more,and the interest rate falls.
• C)more money,so they lend more,and the interest rate rises.
• D)more money,so they lend less,and the interest rate falls.

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Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale at those prices.

Demand Curve

A graph that shows the relationship between the price of a good and the quantity of that good that consumers are willing to purchase.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable change.

Producer Surplus

The gap between what sellers are prepared to take for a product or service and the actual amount they get.