Figure 30-1 -Refer to Figure 30-1.If the Money Supply Is MS₂ and Is

question 83

Multiple Choice

Figure 30-1
-Refer to Figure 30-1.If the money supply is MS₂ and the value of money is 2,then

• A)the quantity of money demanded is greater than the quantity supplied;the price level will rise.
• B)the quantity of money demanded is greater than the quantity supplied;the price level will fall.
• C)the quantity of money supplied is greater than the quantity demanded;the price level will rise.
• D)the quantity of money supplied is greater than the quantity demanded;the price level will fall.

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Definitions:

Price Decrease

A reduction in the cost that buyers must pay for a good or service.

Normal Good

A type of good for which demand increases when income increases, and falls when income decreases.

Income Rises

An increase in the amount of money received by individuals or entities, typically through wages, investments, or business activities.

Demand

The total quantity of goods or services that consumers are willing and able to purchase at a given price level.