According to the quantity equation, if velocity and output are constant, then an increase in the money supply leads to ________ in inflation.
A)a less than proportional increase
B)a less than proportional decreases
C)the same percentage increase
D)a greater than proportional increase

Question

Quizplus · Accepted Answer

The Quantity Equation says: P × Y = M × V. If V and Y are constant, then an increase in M results in an increase in P by the same percentage.

According to the Quantity Equation, If Velocity and Output Are