"If real money demand doubles while the nominal money supply is unchanged, what happens to the price level?" The price level increases by a factor of four. The price level doubles. The price level is unchanged. The price level falls by one-half

The price level doubles.

Explanation:

The market for money is like any other market for goods or services, except that in this specific market, the Fed is a monopoly and everyone else are the consumers. If the demand for money increases, while the supply remains the same, the nominal value of money increases (interest rate increases). This combination of higher demand and higher costs increase the inflation rate which represents the general price level.

The inflation rate basically shows us the difference between the demand for money and the supply of money, and if that difference is two times, then the inflation rate will also double. When the inflation rate ,doubles, it means that the general price level doubles.

answerbuying in bulk;