The equation of exchange becomes the same as the quantity theory of money by assuming that the velocity of circulation ________ when the quantity of money changes and potential GDP ________ when the quantity of money changes
A) changes; changes
B) changes; does not change
C) does not change; changes
D) does not change; does not change
D
Economics
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The government promotes economic efficiency by producing in areas where the market fails to optimally allocate resources
a. True b. False
Economics
Which of the following statements does not apply to a market economy?
a. Firms decide whom to hire and what to produce. b. The "invisible hand" usually maximizes the income of society as a whole. c. Households decide which firms to work for and what to buy with their incomes. d. Government policies are the primary forces that guide the decisions of firms and households.
Economics