When the Money Supply Declines by 10%,in the Long Run,output

question 12

Multiple Choice

When the money supply declines by 10%,in the long run,output ________ and the price level ________.

• A)is unchanged; is unchanged
• B)declines; falls
• C)is unchanged; falls
• D)declines; is unchanged

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Definitions:

Consumer Spending

The total expenditures by households on goods and services, which is a primary component of aggregate demand in an economy.

Increase

A rise in quantity or quality in a given context, such as price, value, or productivity.

Price Elasticity

An index reflecting the degree to which the demand for a product varies with a shift in its cost.

Supply

represents the total amount of a product or service that is available for purchase at any given price in a market.