Holding Nominal Money Balances Constant, a Decrease in the Price

Multiple Choice

Holding nominal money balances constant, a decrease in the price level

A) causes the real value of the money balances to increase, in turn increasing the quantity of goods and services demanded.
B) causes the real value of the money balances to decrease, in turn decreasing the quantity of goods and services demanded.
C) causes the real value of the money balances to increase, thereby increasing the interest rate.
D) generates a reduction in the value of the money balances, leading to higher interest rates and a decrease in the quantity of goods and services demanded.