How does an increase in the price level affect the equilibrium rate of interest?

Question

Quizplus · Accepted Answer

The Answer is An increase in the price level leads to an increase in the transactions demand for money since the public will need more money to pay for the higher priced products.Therefore, the total demand for money increases.The rightward shift of the demand for money causes demand to intersect the supply of money at a higher equilibrium rate of interest.

How Does an Increase in the Price Level Affect the Equilibrium