Other things remaining the same, in the long run ________ in the quantity of money brings an equal percentage ________.
A) an increase; decrease in the price level
B) a decrease; decrease in the price level
C) a decrease; increase in the price level
D) a decrease; increase in the nominal interest rate
E) an increase; increase in the real interest rate

Question

Quizplus · Accepted Answer

In the long run, a decrease in the quantity of money leads to a proportional decrease in the price level, according to the quantity theory of money.

Other Things Remaining the Same, in the Long Run ________