Asked by Colin dunkley on Jul 19, 2024
Verified
The economy of Umrica uses palladium as its money. If the government discovers a large reserve of palladium on their land the
A) supply of money decreases, the value of money rises, and prices fall.
B) supply of money increases, the value of money falls, and prices rise.
C) demand for money increases, the value of money rises, and prices rise.
D) demand for money decreases, the value of money falls, and prices fall.
Palladium
A rare metal used in manufacturing, especially in automotive catalytic converters and electronics, known for its corrosion resistance.
Money Supply
The entire spectrum of monetary assets in an economy at a specific juncture.
- Grasp the interplay between the volume of money in circulation, its valuation, and the overall price level.
Verified Answer
LB
Lizbeth BorundaJul 22, 2024
Final Answer :
B
Explanation :
Discovering a large reserve of palladium increases the supply of money. As the supply of money increases, its value decreases, leading to higher prices, or inflation.
Learning Objectives
- Grasp the interplay between the volume of money in circulation, its valuation, and the overall price level.