increases
decreases
remains constant
None of the above
Answer is Right!
Answer is Wrong!
The correct answer is A. increases.
When the supply of money declines, the value of each individual unit of money increases. This is because there is less money available to buy the same amount of goods and services, so the prices of those goods and services must rise in order to clear the market.
Option B is incorrect because the price of goods would not decrease if the supply of money declined. In fact, the opposite would happen: the price of goods would increase.
Option C is incorrect because the price of goods would not remain constant if the supply of money declined. The price of goods would increase, as explained above.
Option D is incorrect because the price of goods would increase if the supply of money declined.