When Average Prices Rise

question 28

Multiple Choice

When average prices rise,

• A) there is movement up along the money demand curve.
• B) there is movement down along the money demand curve.
• C) the opportunity cost of holding money decreases.
• D) the money demand curve shifts leftward.
• E) the money demand curve shifts rightward.

---

Definitions:

Real Value

The value of an object or service adjusted for inflation, representing its purchasing power.

Nominal Value

The face value of a financial instrument or an item's price in terms of money, without adjustment for inflation or other factors.

Price Level

The ongoing average price for the economy's produced goods and services.

Consumer Price Index

An indicator that calculates the weighted mean of the cost of a collection of consumer products and services, including transportation, food, and healthcare, employed to gauge inflation rates.