According to the Quantity Theory of Money, an Increase in the Money

question 89

Multiple Choice

According to the quantity theory of money, an increase in the money supply leads to:

• A) an increase in prices, as there are more dollar bills spent on the same number of goods and services.
• B) an increase in prices, as there are the same dollar bills spent on a greater number of goods and services.
• C) a decrease in prices, as there are more dollar bills spent on the same number of goods and services.
• D) a decrease in price, as there are the same dollar bills spent on a greater number of goods and services.