What effect does an increase in the price level have on the demand for money and the demand for money curve?
What will be an ideal response?
An increase in the price level increases the demand for money and shifts the demand for money curve rightward.
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The above table shows data on two variables. If these data were graphed, the slope of the line would be
A) 3/5. B) 3. C) 5/3. D) impossible to determine from the information given.
Define the following terms and explain why they are important in the study of economics. a. Efficient allocation b. Laissez-faire c. Peak pricing d. Input-output analysis e. Coordination tasks
What will be an ideal response?
The amount of autonomous consumption in an economy is measured by the:
a. the intercept of the consumption function when disposable income is positive. b. the intercept of the consumption function where actual consumption is above the 45-degree line. c. the intercept of the consumption function when disposable income is zero. d. the intercept of the consumption function where actual consumption is below the 45-degree line. e. the intercept of the consumption function when disposable income is negative.
Product innovation:
A. is accurately reflected in the basket of goods. B. is not an issue for the CPI since it uses a fixed basket of goods and services. C. doesn't cause the CPI to be overestimated. D. presents a problem for those calculating the CPI because they use a fixed basket of goods.