An increase in the price level causes an increase in money demand because
a. people need more money to purchase the same level of goods and services.
b. changes in the price level have no effect on money demand.
c. people have unlimited wants.
d. people need less money to purchase the same level of goods and services.
Ans: a. people need more money to purchase the same level of goods and services.
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Which of the following is likely to shift the labor supply curve to the left, assuming all else equal?
A) A rise in the wage rate B) A social change that discourages women to participate in the labor force C) A fall in the wage rate D) Decrease in the maximum amount of unemployment benefits
One cost of unanticipated inflation is
A) nominal income falls below real income. B) both lenders and borrowers lose. C) arbitrary redistributions of income. D) people cannot repay their debts.
Tastes for perfect complements are both homothetic and quasilinear.
Answer the following statement true (T) or false (F)
If incomes were equal in an economy can you think of any other problems that might exist as a result of this equality?
What will be an ideal response?