Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

A 6% expansion in the money supply causes the level of money income to rise by 4%. What can be deduced from this?

  • AThere has been an increase in interest rates.
  • BThere has been a decrease in the level of output.
  • CThere has been a decrease in the velocity of circulation.
  • DThe price level has increased by 2%.

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