Starting from Long-Run Equilibrium, If the Velocity of Money Increases

question 53

Multiple Choice

Starting from long-run equilibrium, if the velocity of money increases (due to, for example, the invention of automatic teller machines) , the Bank of Canada might be able to stabilize output by:

• A)decreasing the money supply.
• B)increasing the money supply.
• C)decreasing the price level.
• D)increasing the price level.

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