Suppose that M is fixed but that P falls. According to the quantity equation which of...
Suppose that M is fixed but that P falls. According to the quantity equation which of the following could both by themselves explain the decrease in P? a. Y rose, V rose b. Y fell, V fell c. Y rose, V fell d. Y fell, V rose
Homework Answers
We know according to Quantity theory of money MV=PY
when price decreases and money remains same then if Y also decrease due to some reason, then Velocity also decreases
Thus ans is B
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