Discuss an increase in price level on the real money supply

Reference no: EM133269935

Assignment:

1. Discuss the impact of an increase in price level on the real money supply, equilibrium interest rate, interest-related consumption, investment expenditure, aggregate expenditure, and real level of income.

2. A change in the real money supply can result either from a change in the nominal money supply through Federal Reserve policy (holding the price level constant) or from a change in the price level (holding the nominal money supply constant).

3. The change in the nominal money supply causes a shift of the aggregate demand curve, whereas a change in the price level causes a movement along the aggregate demand curve. Explain?

Reference no: EM133269935

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