When the price level falls Answer households want to lend more, so the interest rate rises making the quantity of goods and services demanded rise. households want to lend more, so the interest rate falls, making the quantity of goods and services demanded rise. households want to lend more, so the interest rate rises, making the quantity of goods and services demanded fall. None of the above are correct.

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter13: Money And The Banking System
Section: Chapter Questions
Problem 9CQ
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When the price level falls

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households want to lend more, so the interest rate rises making the quantity of goods and services demanded rise.

households want to lend more, so the interest rate falls, making the quantity of goods and services demanded rise.

households want to lend more, so the interest rate rises, making the quantity of goods and services demanded fall.

None of the above are correct.

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