Suppose a typical basket of goods is now more expensive than it used to be. All else equal, we would expect:

Name: Suppose a typical basket of goods is now more expensive than it used to be. All else equal, we would expect:
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When prices rise, individuals and firms require more money to purchase the same basket of goods, shifting the demand for money outward. This is because they need more money to maintain their level of purchases, which increases the demand for money.

Suppose a Typical Basket of Goods Is Now More Expensive