Suppose that in an economy, the money supply is $40, velocity is 5, the average price is $10, and output is 20. Suppose the money supply falls by half. According to the monetarist school, what is the maximum change possible for the price level and output? What factors would cause no change in output?

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The Answer of Suppose that in an economy, the money supply is $40, velocity is 5, the average price is $10, and output is 20. Suppose the money supply falls by half. According to the monetarist school, what is the maximum change possible for the price level and output? What factors would cause no change in output?

Suppose That in an Economy, the Money Supply Is $40