The classical economists' conclusion that nominal income is determined by movements in the money supply rested on their belief that ________ could be treated as ________ in the short run.
A)velocity;constant
B)velocity;variable
C)money;constant
D)money;variable

Question

Quizplus · Accepted Answer

Classical economists believed that the velocity of money could be treated as constant in the short run, which led them to conclude that changes in the money supply directly affect nominal income.

The Classical Economists' Conclusion That Nominal Income Is Determined by Movements