In the Classical view, the money supply determines
A) interest rates.
B) the saving rate.
C) aggregate supply.
D) the price level.

Question

Quizplus · Accepted Answer

In the Classical view, the money supply determines the price level through the quantity theory of money, which states that changes in the money supply will lead to proportional changes in the price level. Changes in interest rates, saving rates, and aggregate supply are believed to be influenced by other factors such as technology, productivity, and preferences, rather than the money supply.

In the Classical View, the Money Supply Determines