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In the Context of David Hume's Price-Specie-Flow Mechanism That Challenged

Question 9

Multiple Choice

In the context of David Hume's price-specie-flow mechanism that challenged the Feasibility of the Mercantilist ideas regarding a trade surplus, which one of the following Statements is NOT correct?


A) There is a decrease in the money supply in the deficit country.
B) There is an increase in the price level in the surplus country.
C) There is an increase in real income in the surplus country.
D) Price changes in the surplus country cause that country's exports to decrease.

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