Other things being equal, when the price level rises, the real value of money holdings ; when the domestic price level falls, the real value of money holdings _.
A)rises; falls
B)is not affected; rises
C)falls; rises
D)falls; is not affected
E)is not affected; falls

Question

Quizplus · Accepted Answer

When the domestic price level rises, the real value of money holdings falls because it can buy fewer goods and services. Conversely, when the domestic price level falls, the real value of money holdings rises because it can buy more goods and services.

Other Things Being Equal, When the Price Level Rises, the Real