According to the Simple Quantity Theory of Money in the AD-AS

question 83

Multiple Choice

According to the simple quantity theory of money in the AD-AS framework,when the money supply decreases,the result is __________ in Real GDP and __________ in the price level.

• A) no change; no change
• B) a rise; no change
• C) no change; a rise
• D) a rise; a fall
• E) no change; a fall

---

Definitions:

Desired by Society

Pertains to something that is widely regarded as beneficial or needed by the majority of the community or population.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance.