An increase in the real money supply can result from:

Question

Quizplus · Accepted Answer

An increase in the real money supply refers to an increase in the purchasing power of money or in other words, an increase in the quantity of goods and services that can be purchased with the available money supply. This can happen when there is an increase in the nominal money supply or when there is a decrease in the price level. Option B presents both of these possibilities. Option A would only be true if there is no change in the price level, which is not specified in the question. Option C and D both suggest a decrease in real money supply, which is opposite to what the question is asking for.

An Increase in the Real Money Supply Can Result From