Consider the Following Sequence of Events: Price Level $\uparrow \Rightarrow$ Demand for Money

question 243

Multiple Choice

Consider the following sequence of events: price level $\uparrow \Rightarrow$ demand for money $\uparrow \Rightarrow$ equilibrium interest rate $\uparrow$
$\Rightarrow$ quantity of goods and services demanded $\darr$

This sequence explains why the

• A)money-supply curve is vertical.
• B)aggregate-demand curve shifts leftward in response to a monetary injection.
• C)aggregate-demand curve shifts rightward in response to a monetary injection.
• D)aggregate-demand curve slopes downward.

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