When the Money Market Is Drawn with the Value of Money

question 45

Multiple Choice

When the money market is drawn with the value of money on the vertical axis,as the price level increases which of the following increases?

• A)the quantity of money demanded and the quantity of money supplied
• B)the quantity of money demanded but not the quantity of money supplied
• C)the quantity of money supplied but not the quantity of money demanded
• D)neither the quantity of money supplied nor the quantity of money demanded

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Definitions:

Whiskey Tax

A tax imposed on distilled spirits, notably whiskey, historically significant for inciting the Whiskey Rebellion in the United States in the late 18th century.

Pinckney Treaty

A 1795 agreement between the United States and Spain that defined the borders of the United States with Spanish colonies and granted the U.S. the right to navigate the Mississippi River.

Second Great Awakening

A Protestant religious revival movement in the early 19th century United States, which spurred the growth of social reform movements, such as abolitionism and temperance.

Whiskey Rebellion

A tax protest in the United States in the 1790s, during the presidency of George Washington, triggered by a tax imposed on distilled spirits.