Author Question: If a percentage decrease in money supply is followed by a proportional percentage decrease in prices ... (Read 55 times)

sam.t96 · **on:** Jun 30, 2018

If a percentage decrease in money supply is followed by a proportional percentage decrease in prices and output, this means that:
a. the velocity of money is constant.
b. the economy is in a recession.
c. the velocity of money has fallen.
d. real GDP is constant.
e. the economy is not at maximum capacity

Question 2

A surplus exists in the market for Barbie dolls at the prevailing price. The surplus will be eliminated by a price:
a. increase, decreasing the supply and increasing the demand.
b. decrease, decreasing the supply and increasing the demand.
c. decrease, increasing the quantity supplied and increasing the quantity demanded.
d. decrease, decreasing the quantity supplied and increasing the quantity demanded.