According to the Equation of Exchange,total Spending Will Rise If

question 43

True/False

According to the equation of exchange,total spending will rise if the money supply decreases and velocity is stable.
The equation of exchange shows that a drop in the money supply,when velocity is constant,will cause prices and/or the level of output to fall.

---

Definitions:

Proximity Law

A principle in psychology stating that objects that are near to each other tend to be perceived as a unified group.

Perceptual Whole

The concept in Gestalt psychology that emphasizes the human tendency to perceive complete patterns or configurations, not merely as individual components.

Component Parts

Component parts refer to the individual pieces or elements that make up a larger system, machine, or assembly, each serving a specific function within the whole.

Facial Features

Facial features are the parts of the human face, such as eyes, nose, and mouth, which contribute to individual appearance.