In the long run, an increase in the quantity of money ________ the value of money and ________ the price level.
A) raises; raises
B) does not change; raises
C) raises; lowers
D) lowers; raises
E) lowers; lowers

Question

Quizplus · Accepted Answer

In the long run, an increase in the quantity of money lowers the value of money due to inflation and raises the price level as more money chases the same amount of goods and services.

In the Long Run, an Increase in the Quantity of Money