According to the equation of exchange,total spending will rise if the money supply decreases and velocity is stable.
The equation of exchange shows that a drop in the money supply,when velocity is constant,will cause prices and/or the level of output to fall.

Question

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According to the equation of exchange, a drop in the money supply, when velocity is constant, will cause prices and/or the level of output to decrease, not total spending to rise.

According to the Equation of Exchange,total Spending Will Rise If