The Equation of Exchange Indicates That If a Decrease in the Money

question 19

Multiple Choice

The equation of exchange indicates that if a decrease in the money supply does not impact velocity or real GDP, then it must:

• A) cause currency reform to accelerate.
• B) cause currency reform to decelerate.
• C) lead to a decrease in the price level.
• D) lead to an increase in the price level.

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Definitions:

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