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Starting from Long-Run Equilibrium, If the Velocity of Money Increases

Question 53

Multiple Choice

Starting from long-run equilibrium, if the velocity of money increases (due to, for example, the invention of automatic teller machines) , the Bank of Canada might be able to stabilize output by:


A) decreasing the money supply.
B) increasing the money supply.
C) decreasing the price level.
D) increasing the price level.

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