6) State how each of the following would affect the quantity of money demanded. Does the change cause a movement along the money demand curve or a shift of the money demand curve (state the direction of the shift or movement)? a) Interest rates rises from 5% to 8%. b) The consumer price index (CPI) rises in the economy.
6) State how each of the following would affect the quantity of money demanded. Does the change cause a movement along the money demand curve or a shift of the money demand curve (state the direction of the shift or movement)? a) Interest rates rises from 5% to 8%. b) The consumer price index (CPI) rises in the economy.
Chapter16: Monetary Policy
Section: Chapter Questions
Problem 2SQP
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Transcribed Image Text:6) State how each of the following would affect the quantity of money demanded. Does the change
cause a movement along the money demand curve or a shift of the money demand curve (state the
direction of the shift or movement)?
a) Interest rates rises from 5% to 8%.
b) The consumer price index (CPI) rises in the economy.
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