Which of the following is correct?

A. A higher price level shifts money demand rightward.

B. When money demand shifts rightward, the interest rate rises.

C. A higher interest rate reduces the quantity of goods and services demanded.

D. All of the above are correct.

Question

Business

Dixie Henson

5 April, 13:37

Which of the following is correct?

A. A higher price level shifts money demand rightward.

B. When money demand shifts rightward, the interest rate rises.

C. A higher interest rate reduces the quantity of goods and services demanded.

D. All of the above are correct.

+2

Answers (1)

Know the Answer?

Kenna Williamson · Answer 1

Answer: the correct answer is D. All of the above are correct.

Explanation:

A higher price level means prices are higher and I need more money to buy the same things so the demand goes up and A. is correct.

Interest rate is the price of money and if the demand for any good or service goes up, then the price of it goes up, too (ceteris paribus = all else remain constant) and B is correct.

If the interest rate goes up means that money is expensive and I don't want to borrow money so I have less money in my pocket and I can't buy many more things and C is correct so the right answer is D.

Which of the following is correct?A. A higher price level shifts money demand rightward.B. When money demand shifts rightward, the interest rate rises.C. A higher interest rate reduces the quantity of goods and services demanded.D. All of the above are correct.

Which of the following is correct?

A. A higher price level shifts money demand rightward.

B. When money demand shifts rightward, the interest rate rises.

C. A higher interest rate reduces the quantity of goods and services demanded.

D. All of the above are correct.