Looking at historical evidence for the United States and other countries, which of the following are TRUE?
I. There is a correlation between the growth rate of the quantity theory of money and the growth rate of real GDP.
II. There is a correlation between the growth rate of the quantity theory of money and the inflation rate.
A) Only I is true.
B) Only II is true.
C) Both I and II are true.
D) Neither I or II is true.
B
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The linkages of the interest-rate-based transmission mechanism of monetary policy are summarized as follows:
A) change in the money supply ? change in speculative balances ? change in transactions balances ? change in planned investment ? change in aggregate demand. B) change in the money supply ? change in planned investment ? change in government spending ? change in aggregate demand. C) change in the money supply ? change in interest rates ? change in planned investment ? change in aggregate demand. D) change in the money supply ? change in interest rates ? change in transactions balances ? change in government spending ? change in aggregate demand.
The making and selling of a pencil for ten cents would likely NOT be possible, but for
A) relative advantage. B) the production possibilities curve. C) absolute advantage. D) the division of labor.