When the Money Market Is Depicted in a Graph with the Value

question 139

Multiple Choice

When the money market is depicted in a graph with the value of money on the vertical axis, as the price level increases, which of the following happens to the value of money?

• A)It increases, so the quantity of money demanded increases.
• B)It increases, so the quantity of money demanded decreases.
• C)It decreases, so the quantity of money demanded decreases.
• D)It decreases, so the quantity of money demanded increases.

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Definitions:

SUTA Tax

State Unemployment Tax Act tax, a payroll tax that employers pay to fund the state's unemployment insurance.

Medicare

A federal health insurance program in the United States for people aged 65 and older, as well as for some younger people with disabilities.

Federal Income Tax

A tax levied by the IRS on the annual earnings of individuals, corporations, trusts, and other legal entities.

Federal Depository Bank

A financial institution where the government keeps its money and manages its financial transactions.