If a commodity money becomes easier to find or produce, prices denominated in that money will (ceteris paribus)
A) rise.
B) fall.
C) stay the same.
D) cannot be determined.

Question

Quizplus · Accepted Answer

When a commodity money becomes easier to find or produce, its supply increases. According to the principles of supply and demand, if the supply of the money increases while demand remains constant, the value of the money will decrease. This decrease in value means that more of this money is needed to purchase goods and services, leading to a rise in prices denominated in that money.

If a Commodity Money Becomes Easier to Find or Produce