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Assume That the Demand for Money Equals the Supply of Money

Question 61

Multiple Choice

Assume that the demand for money equals the supply of money of $80 billion and that the nominal GDP is $400 billion.According to the monetarist view,by how much will an increase in the money supply of $5 billion increase the nominal GDP?


A) By $30 billion.
B) By $25 billion.
C) By $20 billion.
D) By $10 billion.
E) By zero.

Correct Answer:

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