The monetary approach is derived from the assumptions that:
A) money demand equals money supply.
B) money demand is a fixed proportion of the domestic price level times real income.
C) the law of one price holds.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

The monetary approach is based on the assumptions that money demand equals money supply, money demand is a fixed proportion of the domestic price level times real income, and the law of one price holds, making all of the statements correct.

The Monetary Approach Is Derived from the Assumptions That