Consider the Following Sequence of Events: Price Level ↑ ⇒

question 507

Multiple Choice

Consider the following sequence of events: price level ↑ ⇒ demand for money ↑ ⇒ equilibrium interest rate ↑
⇒ quantity of goods and services demanded ↓
Τhis 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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