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If Policies of the Fed Cause the Money Supply to Increase

Question 93

Multiple Choice

If policies of the Fed cause the money supply to increase, and velocity is held constant, the expected outcome would be:​


A) ​P If policies of the Fed cause the money supply to increase, and velocity is held constant, the expected outcome would be:​ A) ​P Q would increase, and the general price level would increase if Q remained constant. B) ​P Q would decrease, and the general price level would decrease if Q remained constant. C) ​P Q would decrease, and the general price level would increase if Q increased. D) ​insufficient information is available to arrive at a conclusion. Q would increase, and the general price level would increase if Q remained constant.
B) ​P If policies of the Fed cause the money supply to increase, and velocity is held constant, the expected outcome would be:​ A) ​P Q would increase, and the general price level would increase if Q remained constant. B) ​P Q would decrease, and the general price level would decrease if Q remained constant. C) ​P Q would decrease, and the general price level would increase if Q increased. D) ​insufficient information is available to arrive at a conclusion. Q would decrease, and the general price level would decrease if Q remained constant.
C) ​P If policies of the Fed cause the money supply to increase, and velocity is held constant, the expected outcome would be:​ A) ​P Q would increase, and the general price level would increase if Q remained constant. B) ​P Q would decrease, and the general price level would decrease if Q remained constant. C) ​P Q would decrease, and the general price level would increase if Q increased. D) ​insufficient information is available to arrive at a conclusion. Q would decrease, and the general price level would increase if Q increased.
D) ​insufficient information is available to arrive at a conclusion.

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