If a company pays dividends of $8000, total stockholders:.a. equity will be reduced by $8000. b. retained earnings will be reduced by $8000. c. both retained earnings and total stockholders equity will be reduced by $8000. d. net income will be reduced by $8000.

b. retained earnings will be reduced by $8000

Explanation:

The journal entries are as follows:

Retained earning A/c Dr  $8,000

             To Dividend payable A/c $8,000

(Being the dividend is declared)

Dividend payable A/c Dr $8,000

         To Cash A/c $8,000

(Being the dividend is paid in cash)

So at the time of dividend paid, the retained earnings got reduced by $8,000

The price level doubles.

Explanation:

The market for money is like any other market for goods or services, except that in this specific market, the Fed is a monopoly and everyone else are the consumers. If the demand for money increases, while the supply remains the same, the nominal value of money increases (interest rate increases). This combination of higher demand and higher costs increase the inflation rate which represents the general price level.

The inflation rate basically shows us the difference between the demand for money and the supply of money, and if that difference is two times, then the inflation rate will also double. When the inflation rate ,doubles, it means that the general price level doubles.