MONEY 2

The value of money is affected by the

• price level

• precautionary motive

• intervention of development

• speculative motive

If the current price of an apple is twice that of last year, it implies that the value of money is

• falling

• stable

• rising

• getting stronger

The indicator of the value of money in the market is the

• the general price level

• effective supply

• the equilibrium price

• effective demand

A price index as a statistic, measures

• how the value of money changes over time

• the volume of currency in the economy

• the exchange rate of a country's currency

• the composition of goods and services

The quantity theory of money states that a reduction in the quantity of money in circulation would bring about

• a geometrical fall in prices

• a proportionate fall in prices

• a rise in prices

• an unequal fall in prices