In the strict monetarist view, a large increase in the money supply will have:
A) A large impact on the velocity of money and a large impact on nominal output
B) A large impact on the velocity of money and a small impact on nominal output
C) No effect on the velocity of money and a large impact on nominal output
D) No effect on the velocity of money and a small impact on the nominal output

Question

Quizplus · Accepted Answer

Strict monetarists believe that the velocity of money is stable, so a large increase in the money supply will primarily affect nominal output, not the velocity.

In the Strict Monetarist View, a Large Increase in the Money