Asked by Valerie Elisabette on May 14, 2024
Verified
The price level is determined by the supply of, and demand for, money.
Price Level
The economy-wide current average price for its entire range of goods and services.
Supply of Money
The total amount of money available in an economy at a specific time, including currency and deposits.
- Fathom the linkage between the quantity of money in circulation, the desire for it, and its worth.
Verified Answer
MK
Manoj KattelMay 19, 2024
Final Answer :
True
Explanation :
The price level in an economy is influenced by the supply of and demand for money because when there is more money circulating (supply) than there is a demand for it, prices tend to rise (inflation), and when there is less money circulating than demanded, prices tend to fall (deflation).
Learning Objectives
- Fathom the linkage between the quantity of money in circulation, the desire for it, and its worth.