Assuming That Money Is Neutral,a Reduction in the Nominal Money

question 29

Multiple Choice

Assuming that money is neutral,a reduction in the nominal money supply would cause

• A)an excess demand for goods.
• B)a decrease in the real money supply.
• C)a fall in the price level.
• D)a rise in nominal wages.

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Definitions:

Import Quota

A legal limit on the quantity of a good that can be imported.

Nontariff Barrier

Any form of restrictive regulation or procedure other than tariffs that countries use to control the amount of trade across their borders, including quotas, embargoes, sanctions, and levies.

Export Quota

A government-imposed limit on the quantity of a specific good that can be exported over a given period, used to control trade balances.

Domestic Consumption

This term refers to the total amount of goods and services consumed within a country's borders, indicating the level of domestic demand.