According to the simple quantity theory of money, if the money supply falls by 20 percent,
A) the price level will fall by 20 percent.
B) Real GDP will rise by less than 20 percent.
C) GDP will fall by 20 percent.
D) velocity will rise.
E) a and c
E
You might also like to view...
Porter's five forces portray
a. A zero-sum game b. A game where your profitability comes at the expense of someone else's c. The ability of market participants to create a larger total pie d. Only A&B
Which of the following statements is not correct?
A. A reduction in money income will shift the budget line to the right. B. A reduction in money income accompanied by an increase in product prices will necessarily shift the budget line to the left. C. An increase in product prices will shift the budget line to the left. D. An increase in money income will shift the budget line to the right.