In the long run, if the quantity of money supplied ________ the quantity demanded, the value of money ________.
A) exceeds; falls as people spend their surplus money
B) exceeds; rises as people buy bonds
C) is less than; falls as people spend their surplus money
D) is less than; does not change unless the Fed increases the money supply
E) equals; equals zero

Question

Quizplus · Accepted Answer

In the long run, if the money supply exceeds the quantity demanded, people will spend their surplus money, leading to inflation and a decrease in the value of money.

In the Long Run, If the Quantity of Money Supplied