The quantity theory of money along with the assumption of a constant velocity can explain which of the following?
A) At a given level of money growth, the higher the level of real growth the higher the level of inflation will be.
B) At a given level of money growth, the higher the level of real growth the lower the level of inflation will be.
C) If real growth is higher than money growth, the price level must be rising.
D) If real growth equals money growth, the price level is falling.
Correct Answer:
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Q16: Using the equation of exchange, if inflation
Q17: Using the equation of exchange, if real
Q18: The velocity of money increases if:
A) each
Q19: If the equation of exchange is MV
Q20: Inflation can be thought of as:
A) an
Q22: If the nominal interest rate increases:
A) the
Q23: When nominal interest rates are high, the
Q24: During economic slowdowns (recessions) the velocity of
Q25: Equilibrium in the money market would be
Q26: If we look at the equation for
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