Suppose that over some period the money supply tripled,velocity was unchanged,and real GDP doubled.According to the quantity equation the price level is now

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Quizplus · Accepted Answer

The quantity equation is MV = PY. If the money supply (M) triples and velocity (V) is unchanged, then MV triples. If real GDP (Y) doubles, then PY must also triple to maintain the equality. Therefore, the price level (P) is 1.5 times its old value (3/2 = 1.5).

Suppose That Over Some Period the Money Supply Tripled,velocity Was