Which of the following best illustrates the medium of exchange function of money?
a. You keep some money hidden in your shoe.
b. You keep track of the value of your assets in terms of currency.
c. You pay for your oil change using currency.
d. None of the above is correct.
c
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An increase in the price level results in a(n) ________ in the quantity of real GDP demanded because ________
A) decrease; a higher price level increases consumption, investment, and net exports. B) increase; a higher price level increases consumption, investment, and net exports. C) decrease; a higher price level reduces consumption, investment, and net exports. D) increase; a higher price level reduces consumption, investment, and net exports.
In the long run, money demand and money supply determine
a. the price level and the real interest rate. b. the price level but not the real interest rate. c. the real interest rate but not the price level. d. neither the price level nor the real interest rate.