When the general price level increases what will happen

Reference no: EM13233991

In the money market, money supply is determined by the central bank, such as the Fed in the U.S. Because of this, money supply curve is usually vertical in the short run, while the money demand curve is downward sloping. The quantity demanded of money has an inverse relationship with the interest rate, but a direct relationship with both the price level and real GDP. Therefore, when the general price level increases, what will most likely happen?

Reference no: EM13233991

Questions Cloud

Define departmental processes : Define departmental processes, enterprise processes, and inter-enterprise processes. Describe their characteristics.

Define homomorphism : Let ? = {a,b} and ? = {0,1}. Define homomorphism as h(a) = 01, h(b) =0

Explain what is the enthalpy change for the neutralization : The solutions start out at 22.50 deg C, and the final temperature after reaction is 24.28 deg C. The densities of the solutions are all 1.00 g/mL, and the specific heat of the mixture is 4.2 J/g deg C . What is the enthalpy change for the neutrali..

What are the benefits of working for someone else : What are the benefits of working for someone else? What are the advantages of being part of a company or agency that is established? Instead of being a entrepreneur. Explain.

When the general price level increases what will happen : In the money market, money supply is determined by the central bank, such as the Fed in the U.S. Because of this, money supply curve is usually vertical in the short run, while the money demand curve is downward sloping.

Find the total capacity total charge and the voltage : Find the total capacity, total charge and the voltage across C1 and C2 given C1= 15nF and C2= 25nF are connected in parallel across a 200 volt supply

Why are information systems so essential for running : Why are information systems so essential for running and managing a business today?

How are information systems transforming business : How are information systems transforming business, and what is their relationship to globalization?

Explain liquid bromine at room temperature : a student is asked to calculate the amount of heat involved in changing 10 grams of liquid bromine at room temperature (22.5 C) to vapor at 59 C. To do this, one must use tables 8.1 and 8.2 for information on the specific heat, boiling points

User Account

All Pages