According to the quantity theory of money, a 15 percent increase in the quantity of money creates a 15 percent rise in
A) the price level.
B) the velocity of circulation.
C) real GDP.
D) the unemployment rate.

Question

Quizplus · Accepted Answer

The quantity theory of money suggests that an increase in the quantity of money in an economy will lead to a proportional increase in the price level, assuming velocity of money and real GDP remain constant.

According to the Quantity Theory of Money, a 15 Percent