Question on: SS2 Economics - Determinants of Supply And Demand For Money
How does an increase in the general price level affect the demand for money?
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A
People tend to hold less money
B
People tend to hold more money
C
It has no effect on the demand for money
D
None of the above
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Correct Option: B
(As the general price level in the economy increases, people tend to hold more money because they need more to pay for goods and services)
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