According to the equation of exchange,economic logic would indicate that in order to avoid inflation,an increase in V must be accompanied by

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According to the equation of exchange, MV=PT, where M is money supply, V is velocity of money, P is price level, and T is number of transactions. In order to avoid inflation, an increase in V must be accompanied by a decrease in M or a decrease in T, or both. Since T is not under the control of the monetary authorities, a decrease in M is the best choice to avoid inflation when there is an increase in V. Therefore, choice C, a decrease in the supply of money, is the correct answer.

According to the Equation of Exchange,economic Logic Would Indicate That