Figure 30-1 -Refer to Figure 30-1. If the money supply is MS 2 and the value of money is 4, then the quantity of money

When the quantity of money supplied is greater than the quantity demanded, it indicates an excess supply of money in the economy. This typically leads to inflation, causing the price level to rise, as more money chases the same amount of goods and services.

Figure 30-1 -Refer to Figure 30-1. If the money supply is MS 2 and the value of money is 4, then the quantity of money

When the quantity of money supplied is greater than the quantity demanded, it indicates an excess supply of money in the economy. This typically leads to inflation, causing the price level to rise, as more money chases the same amount of goods and services.

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Figure 30-1 -Refer to Figure 30-1. If the Money Supply Is MS₂

Question 156

Multiple Choice

Figure 30-1
-Refer to Figure 30-1. If the money supply is MS₂ and the value of money is 4, then the quantity of money

A) demanded is greater than the quantity supplied; the price level will rise.
B) demanded is greater than the quantity supplied; the price level will fall.
C) supplied is greater than the quantity demanded; the price level will rise.
D) supplied is greater than the quantity demanded; the price level will fall.

Correct Answer: