Answer 23. it rises and so the price level falls
reason- When it takes less money to buy same basket of goods, it means the value of money has Increased. The price level falls as there is inverse relationship between price and value of money.
Answer 24. It increases the price level and decreases the value of money.
reason- When money supply increases, the value of money falls as there is excess money. It means the price level rises as money is less valued now. The same bundle of goods and services will cost more now.
Question 23 (1 point) When the number of dollars needed to buy a representative basket of...
Thank you in advance! Question 5 -- 12 In the long run, money demand and money supply determine (1) the value of money but not the real interest rate. (2) the value of money and the real interest rate. (3) neither the value of money nor the real interest rate. (4) the real interest rate but not the value of money. Question 6 (-/2 ) When the money market is drawn with the value of money on the vertical axis,...
Line A 1965 1970 1975 1995 2000 2005 2010 1980 1985 1990 32. Refer to Figure 33-1. Line A is a. investment spending. b. unemployment rate. c. real GDP. arlgin d. CPI. 33. The value of money falls as the price level a. falls, because the number of dollars needed to buy a representative basket of goods rises. b. rises, because the number of dollars needed to buy a representative basket of goods falls. c. falls, because the number of...
Question 27 (1 point) ✓ Saved According to the Classical Theory of Inflation: an increase in the price level causes the CPI index to fall to offset the increase. there is no relationship between price level increases and the value of money. These are two completely unrelated concepts. when the overall price level increases, the value of money also increases since it takes more money to purchase the same quant of goods as before. when the overall price level increases,...
TL_sessinent_id=_494078_1&course_id=_293405_1&new_attem Question Completion Status: QUESTION 1 080106 When the money market is drawn with the value of money on the vertical axis, an increase in the money supply shifts the money supply curve to the right, lowering the price level. right, raising the price level. left, raising the price level. left, lowering the price level QUESTION 2 080108 When the money market is drawn with the value of money on the vertical axis, the price level decreases if either money...
A) Structurally unemployed. B) Cyclically unemployed. CV Frictionally unemployed D Seasonally unemployed. 15. Inflation is: A) A rise in the price of every good and service. B) An increase in relative prices of all goods and services. A situation in which purchasing power increases (D) An increase in the average level of prices of goods and services. 16. Real income is: A) Nominal income adjusted for inflation B) The amount of money income received in a given time period, measured...
has to spend s] When the consumer price index falls, the typical family fewer dollars to maintain the same standard of living. economy' s overall price level is rising. which to choose, and this in turn increases the cost of maintaining the 6l Economists use the term inflation to describe a situation in which the 17) When a new good is introduced, consumers have more variety from same level of economic well-being. 18) The real interest rate is the interest...
Question 3 Which of the following causes the SRAS curve to shift left? O A decrease in the money supply An increase in the Marginal Propensity to Consume An increase in the price of oil An increase in the amount of human capital A decrease in the actual price level Question 4 Suppose the economy is in its long run equilibrium. If there is a decrease in consumption, what happens in the short run? Price level rises and output rises...
Question 2 (1 point) A decrease in supply shifts the supply curve to the left. True False Question 4 (1 point) The equilibrium price is the same as the market-clearing price. True False Question 5 (1 point) When the market price is above the equilibrium price, the quantity of the good demanded exceeds the quantity supplied. True False Question 6 (1 point) Which of the following events must cause equilibrium price to fall? a) demand increases and supply decreases b)...
Figure 30-1 Value of Money MSI MS2 ----VAJB Money Demand Quantity of Money Refer to Figure 30-1. If the current money supply is MS1, then Select one: a. equilibrium exists when the equilibrium is at point D. b. equilibrium exists when the value of money is 2. C. equilibrium exists when the value of money is 1. O d. there is excess demand if the value of money is 2. When the money market is drawn with the value of...
D Question 2 1 pts Other things the same, as the number of stocks in a portfolio decreases, Risk decreases and so the standard deviation of the return falls O Risk increases and so the standard deviation of the return falls O Risk increase and so the standard deviation of the return rises O Risk decreases and so the standard deviation of the return rises