According to the basic quantity equation of money, if price and output fall while velocity increases, then: the quantity of money will rise. the quantity of money will fall. the quantity of money will rise before it falls. the quantity of money will rise slowly.

Respuesta :

The quantity of money will fall.

According to the quantity theory of money, the overall price level of goods and services in an economy is proportional to the money supply, assuming that the level of actual output is constant and velocity of the money is constant.

The same dynamics that drive the supply and demand of any product also influence the supply and demand of money: an increase in money supply, in general, reduces the marginal value of money, reducing the purchasing power of one unit of currency.

Therefore, the correct option is the  quantity of money will fall.

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