Answered

Discover answers to your questions with Westonci.ca, the leading Q&A platform that connects you with knowledgeable experts. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

Consider the short run and the long run and then choose the statement that is correct.
A. In the short run, other things remaining the same, a given percentage change in the quantity of money brings an equal percentage change in the price level.
B. In the short run, money market equilibrium determines the price level.
C. The real interest rate is independent of the inflation rate in the long run.
D. The real interest rate is dependent on the price level in the long run

Sagot :

anthougo

Answer:

The correct statement is:

A. In the short run, other things remaining the same, a given percentage change in the quantity of money brings an equal percentage change in the price level.

Explanation:

This economic situation is due to the market forces of demand and supply.  Therefore, when the interest rate rises, if everything else remains equal, the opportunity cost of holding money rises.  At the same time, the quantity of money demanded in the market decreases.

Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.