As the price level decreases, the value of money
a. increases, so people must hold less money to purchase goods and services.
b. increases, so people must hold more money to purchase goods and services.
c. decreases, so people must hold more money to purchase goods and services.
d. decreases, so people must hold less money to purchase goods and services.
a
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Suppose the automobile industry can import 10% of the total quantity demanded of cars in the U.S. This is an example of a(n) ________.
A. import tax B. tariff C. quota D. trade limit
The uncertainty costs of inflation cause people to
A) incur more shoe leather costs. B) increase their demand for money. C) focus on the long run, which increases investment and speeds growth. D) focus on the short run, which decreases investment and slows growth. E) increase investment causing economic growth to decrease.
Price elasticity of demand is defined as
A) the change in price divided by the change in quantity demanded. B) the change in quantity demanded divided by the change in price. C) the percentage change in price divided by the percentage change in quantity demanded. D) the percentage change in quantity demanded divided by the percentage change in price. E) the quantity demanded divided by the price.
Preferential trade agreements have a beneficial trade-diversion effect when they reduce prices for traded goods and stimulate the volume of international trade
a. True b. False Indicate whether the statement is true or false