The Quantity Theory of Money States That as the Supply

question 42

True/False

The quantity theory of money states that as the supply of money increases relative to the demand for money, people will make adjustments in their portfolios of assets. First, they will buy bonds, stocks, and then real assets.

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Definitions:

Ledger

A book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type.

Transposition

The accidental rearrangement of digits of a number. Example: 152 → 125.

Error

A mistake in recording transactions or in financial statements, often requiring adjustments or corrections.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure a company's bookkeeping system is mathematically correct.