The quantity theory of money states that the money supply

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The quantity theory of money states that the money supply (M), velocity of money (V), price level (P), and real GDP (Y) are related by the equation . According to this equation, if velocity and real GDP are constant and the Federal Reserve decreases the money supply, then the price level _____. A. decreases B. increases C. does not change D. increases rapidly, then decreases slowly

Reference no: EM131112697

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