Question

If the Federal Reserve printed too little money, money's relative price would _____________________ and the money price of goods would _________________________.

a. all; fall
b. rise; fall
c. fall; rise
d. rise; rise

Answer 1

Answer:

b. rise; fall

Explanation:

If the Federal Reserve printed too little money, there would be a leftward shift of the supply curve. This would lead to a rise in money's relative price. This would lead to a rise in the value of money as less money would be needed to buy goods and services. So, the money price of goods would fall