When the economy experiences inflation, people demand a:
A. higher quantity of money, shifting the money demand curve leftward.
B. lower quantity of money, shifting the money demand curve rightward.
C. higher quantity of money, shifting the money demand curve rightward.
D. lower quantity of money, shifting the money demand curve leftward.
Answer: C
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Fighting inflation by slowing the growth of aggregate demand is
a. endorsed by most politicians. b. a convenient way to reduce inflation. c. unpopular with politicians. d. always easily accepted by firms and workers.
The irrelevance of monetary changes for real variables is called monetary neutrality. Most economists accept monetary neutrality as a good description of the economy in the long run, but not the short run
a. True b. False Indicate whether the statement is true or false
Spending on durable goods, nondurable goods, and services is included in:
A. net exports. B. consumption expenditures. C. government purchases. D. investment.
Usury laws are a form of price ____________ and the minimum wage law is a form of price ___________________.
A. floor; floor B. ceiling; ceiling C. ceiling; floor D. floor; ceiling