When the Money Market Is Drawn with the Value of Money

question 123

Multiple Choice

When the money market is drawn with the value of money on the vertical axis,an increase in the price level causes a

• A)shift to the right of the money demand curve.
• B)shift to the left of the money demand curve.
• C)movement to the left along the money demand curve.
• D)movement to the right along the money demand curve.

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Definitions:

Term

The time period for which a loan or investment is made.

Rate of Interest

The rate at which interest is applied to a loan or credited to savings.

Investment

Allocating resources, usually money, with the expectation of earning an income or profit.

Term Deposits

Fixed-term savings accounts that typically offer higher interest rates, where money is locked in for a certain period.