If the Fed doubled the money supply in one day, the amount of goods and services traded would:
A) not change.
B) increase.
C) decrease.
D) fall to zero.

Question

Quizplus · Accepted Answer

Doubling the money supply in one day would not immediately change the amount of goods and services traded. The quantity of goods and services in the economy is determined by factors like production capacity and resources, not the amount of money in circulation. Changes in the money supply can affect inflation and purchasing power over time, but the immediate physical availability of goods and services remains unchanged.

If the Fed Doubled the Money Supply in One Day