In the classical model,a 20 percent increase in the money growth rate leads to:

Name: In the classical model,a 20 percent increase in the money growth rate leads to:
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Quizplus · Accepted Answer

In the classical model, a 20 percent increase in the money growth rate leads to a 20 percent increase in the inflation rate, as the quantity theory of money suggests that the proportionate increase in the money supply leads to the same proportionate increase in the price level. Therefore, the correct answer is D.

In the Classical Model,a 20 Percent Increase in the Money