Other things remaining the same, if the quantity of money increases by a given percentage, then in the long run the_{--------------------} by the same percentage. A)real interest rate rises B)price level rises C)real interest rate falls D)nominal interest rate falls E)price level falls

Question

Quizplus · Accepted Answer

In the long run, an increase in the money supply leads to a proportional increase in the price level, according to the quantity theory of money.

Other Things Remaining the Same, If the Quantity of Money