According to the quantity theory of money, a 15 percent increase in the quantity of money causes a 15 percent rise in

Question

Quizplus · Accepted Answer

According to the quantity theory of money, there is a direct relationship between the quantity of money and the price level. Therefore, a 15 percent increase in the quantity of money will cause a 15 percent rise in the price level. The other options, such as the velocity of circulation, unemployment rate, and real GDP, are not directly affected by changes in the quantity of money.

According to the Quantity Theory of Money, a 15 Percent