Suppose that the nominal money supply (M) is $200 million and the value of aggregate output (PQ) is $1 billion.It must be the case that
A) the economy is suffering from inflation.
B) the average price paid for a "typical" good is $5.
C) there will be a shortage of money balances in the economy.
D) the income velocity of money is 5.
Correct Answer:
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