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    Question

    Starting from a position where the nation's money demand

    equals the money supply and its balance of payments is in equilibrium its balance of payments would move into a surplus position if there occurred in the nation a (an)?
    A decrease in the money supply Correct Answer Incorrect Answer
    B increase in the money supply Correct Answer Incorrect Answer
    C decrease in the money demand Correct Answer Incorrect Answer
    D None of the above Correct Answer Incorrect Answer
    E A and C Correct Answer Incorrect Answer

    Solution

    Starting from a position where the nation's money demand equals the money supply and its balance of payments is in equilibrium its balance of payments would move into a surplus position if there occurred in the nation a decrease in the money supply.

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