According to the quantity theory of money
A) V and M are constant.
B) V and Y are not affected by the quantity of money.
C) V and P are not affected by the quantity of money.
D) V and M are not affected by changes in the price level.

Question

Quizplus · Accepted Answer

The quantity theory of money assumes that the velocity of money (V) and real output (Y) are not affected by changes in the quantity of money (M), implying that changes in M primarily affect the price level (P).

According to the Quantity Theory of Money