In the Context of David Hume's Price-Specie-Flow Mechanism That Challenged

question 9

Multiple Choice

In the context of David Hume's price-specie-flow mechanism that challenged the Feasibility of the Mercantilist ideas regarding a trade surplus, which one of the following Statements is NOT correct?

• A) There is a decrease in the money supply in the deficit country.
• B) There is an increase in the price level in the surplus country.
• C) There is an increase in real income in the surplus country.
• D) Price changes in the surplus country cause that country's exports to decrease.

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