If the income elasticity of money demand is 3/4 and income increases by 8%, by about how much does the price level change?
(a) Falls by 6%.
(b) Unchanged.
(c) Rises by 6%.
(d) Rises by 8%
Answer: A
If the income elasticity of money demand is 3/4 and income increases by 8%, by about how much does the price level change?
(a) Falls by 6%.
(b) Unchanged.
(c) Rises by 6%.
(d) Rises by 8%
Answer: A
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