Other things the same,if the money supply rises by 2% and people were expecting it to rise by 5%,then some firms have
A)higher than desired prices,which increases their sales.
B)higher than desired prices,which depresses their sales.
C)lower than desired prices,which increases their sales.
D)lower than desired prices,which depresses their sales.

Question

Quizplus · Accepted Answer

If the money supply rises by less than expected, firms may have set their prices higher than desired based on the expectation of a 5% increase. This discrepancy can lead to depressed sales as the actual increase in money supply is only 2%, reducing the purchasing power relative to expectations.

Other Things the Same,if the Money Supply Rises by 2