According to the quantity theory of money, an increase in the quantity of money increases average prices,
A) has no effect on real GDP, and decreases velocity.
B) and increases both real GDP and velocity.
C) decreases real GDP, and increases velocity.
D) increases real GDP, and decreases velocity.
E) and has no effect on real GDP or velocity.

Question

Quizplus · Accepted Answer

The Answer of According to the quantity theory of money, an increase in the quantity of money increases average prices,
A) has no effect on real GDP, and decreases velocity.
B) and increases both real GDP and velocity.
C) decreases real GDP, and increases velocity.
D) increases real GDP, and decreases velocity.
E) and has no effect on real GDP or velocity.

According to the Quantity Theory of Money, an Increase in the Quantity