The statement that a 2% increase in the money supply leads to a 2% increase in the price level is an example of a(n)
A)prediction.
B)assumption.
C)normative statement.
D)variable.
E)model.

Question

Quizplus · Accepted Answer

This statement is an example of a prediction because it forecasts the outcome (a 2% increase in the price level) resulting from a specific action (a 2% increase in the money supply).

The Statement That a 2% Increase in the Money Supply