According to the quantity theory of money, which one of the following economic variables would change in response to an increase in the money supply?
A) prices
B) real income
C) velocity
D) employment

Question

Quizplus · Accepted Answer

According to the quantity theory of money, an increase in the money supply would lead to an increase in prices. This theory suggests that there is a direct relationship between the amount of money in circulation and the level of prices in the economy.

According to the Quantity Theory of Money, Which One of the Following