If the general price level were to increase, other things being equal, the money demand function would

Name: If the general price level were to increase, other things being equal, the money demand function would
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the general price level increases, the purchasing power of money decreases. This leads to people needing more money to buy the same amount of goods and services. As a result, the demand for money increases, and the money demand function shifts to the right.

If the General Price Level Were to Increase, Other Things