Using monetary theory, one can show that the price level (index) in an economy is equal to:
A) the inflation rate minus the interest rate.
B) the average change in the level of trade over the past five quarters.
C) the velocity of money.
D) the ratio of the nominal supply of money to the demand for real balances.

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The Answer of Using monetary theory, one can show that the price level (index) in an economy is equal to:
A) the inflation rate minus the interest rate.
B) the average change in the level of trade over the past five quarters.
C) the velocity of money.
D) the ratio of the nominal supply of money to the demand for real balances.

Using Monetary Theory, One Can Show That the Price Level