If a Percentage Decrease in Money Supply Is Followed by a Proportional

question 15

Multiple Choice

If a percentage decrease in money supply is followed by a proportional percentage decrease in prices and output, this means that:

• A)the velocity of money is constant.
• B)the economy is in a recession.
• C)the velocity of money has fallen.
• D)real GDP is constant.
• E)the economy is not at maximum capacity

---

Definitions:

Benefits And Costs

The positive outcomes (benefits) and negative outcomes (costs) associated with a particular action or investment, often analyzed in decision-making.

Weak Property Rights

Situations where ownership rights are not fully enforced, leading to potential misuse or underinvestment in resources.

Faster Extraction

The increased rate at which natural resources are removed from the environment, often aiming to meet high demand but potentially leading to sustainability issues.

Long-term Stream

A sustained flow or sequence of activities, processes, or outputs extending over a lengthy period.