When the Money Market Is Drawn with the Value of Money

question 234

Multiple Choice

When the money market is drawn with the value of money on the vertical axis,if money demand shifts leftward,then initially there is an

• A)excess demand for money which causes the price level to rise.
• B)excess demand for money which causes the price level to fall.
• C)excess supply of money which causes the price level to rise.
• D)excess supply of money which causes the price level to fall.

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Definitions:

Equity Multiplier

A financial leverage ratio that measures a company's total assets financed by stockholders' equity.

Sales On Account

Transactions where the customer purchases goods or services on credit, agreeing to pay the seller at a later date.

Cost Of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material and labor costs.

Operating Cycle

The duration of time from the acquisition of inventory to the collection of cash from accounts receivable, representing the process of turning assets into cash.