The quantity theory of money ________.
A)is formulated in terms of aggregate output because the nominal value of transactions is difficult to measure
B)assumes that the nominal value of transactions are a constant portion of aggregate output
C)assumes velocity is constant in the short run
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The quantity theory of money is formulated in terms of aggregate output because the nominal value of transactions is difficult to measure, and it assumes that the nominal value of transactions is a constant portion of aggregate output. Additionally, it assumes velocity is constant in the short run. Therefore, all of the above statements are true.

The Quantity Theory of Money ________