A Higher Level of Income Causes the Demand for Money

question 30

Multiple Choice

A higher level of income causes the demand for money to ________ and the interest rate to ________.

• A) decrease; decrease
• B) decrease; increase
• C) increase; decrease
• D) increase; increase

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Definitions:

Specialization

The process by which individuals, organizations, or nations concentrate on producing a limited range of goods or services, to increase efficiency and productivity.

Exchange

The act of trading goods, services, currencies, or other commodities between parties.

Self-interest

The pursuit of personal advantages and well-being, often guiding individual economic decisions.

Division of Labor

A method that breaks down the production of a product into a series of specific tasks, each performed by a different worker.