Which of the following is not one of the assumptions of the quantity theory of money?
A)Velocity is constant.
B)The money growth rate is constant.
C)Real output is independent of the money supply.
D)Causation goes from money supply to prices.

Question

Quizplus · Accepted Answer

The quantity theory of money does not assume that the money growth rate is constant. It primarily focuses on the relationship between the money supply and price level, assuming that the velocity of money is constant and that the money supply influences prices directly, without asserting a constant growth rate for money.

Which of the Following Is Not One of the Assumptions