As the price level decreases, which of the following happens to the value of money?
A)It increases, so people want to hold more of it.
B)It increases, so people want to hold less of it.
C)It decreases, so people want to hold more of it.
D)It decreases, so people want to hold less of it.

Question

Quizplus · Accepted Answer

As the price level decreases, the value of money increases because each unit of currency can now purchase more goods and services. Consequently, people may want to hold less money since they need fewer units to make the same purchases.

As the Price Level Decreases, Which of the Following Happens