The quantity theory asserts that real GDP is
A) not influenced by the quantity of money.
B) never different from potential GDP.
C) equal to nominal GDP multiplied by the quantity of money.
D) equal to nominal GDP divided by the quantity of money.

Question

Quizplus · Accepted Answer

The quantity theory of money asserts that the quantity of money available in an economy does not influence the real GDP, as real GDP is determined by physical factors like labor, capital, and technology, not by monetary factors.

The Quantity Theory Asserts That Real GDP Is