According to the quantity theory of money, an increase in the money supply leads to a(n) _______ in prices, as _______ dollar bills are spent on _______ goods and services.
A) increase; more; the same number of
B) increase; the same number of; more
C) decrease; more; the same number of
D) decrease; the same number of; more

Question

Quizplus · Accepted Answer

The quantity theory of money suggests that an increase in the money supply leads to an increase in prices because more money is chasing the same number of goods and services, leading to inflation.

According to the Quantity Theory of Money, an Increase in the Money