Question

Suppose that an economy in 10000 B.C. used a rare stone as its money. Suppose also that the number of stones declined over time as stones were accidentally destroyed or used as weapons. What probably happened to the value of the stones over​ time? A. If the number of stones​ declined, the value of the remaining stones would have increased​ (deflation). B. If the number of stones​ declined, the value of the remaining stones would have decreased​ (inflation). C. If the number of stones​ declined, the remaining stones would have no value. D. If the number of stones​ declined, the value of the remaining stones would have remained the same.

Answer 1

A. If the number of stones​ declined, the value of the remaining stones would have increased​ (deflation)

Step-by-step explanation:

If the number of stones declined, the number of stones available for use as currency would reduce. This would lead to scarcity of stone (money) as money supply would fall. Due to this scarcity, the value of stones would rise.

A fall in money supply can lead to deflation

Deflation is a general decline in prices for goods and services.