Multiple Choice
If the Bank of Canada reduces the money supply by 5 percent and the quantity theory of money is true, then output will fall 5 percent in the short run, and:
A) prices will remain unchanged in the long run.
B) output will fall 5 percent in the long run.
C) prices will fall 5 percent in the long run.
D) output will remain unchanged in the long run.
Correct Answer:
Verified
Correct Answer:
Verified
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