According to the Quantity Theory of Money, a Decrease in the Quantity

question 183

Multiple Choice

According to the quantity theory of money, a decrease in the quantity of money causes

• A) both average prices and real GDP to decrease.
• B) average prices to decrease but nominal GDP to increase.
• C) both average prices and nominal GDP to increase.
• D) both average prices and nominal GDP to decrease.
• E) average prices to decrease but nominal GDP will stay constant.