The quantity theory of money is the idea that in the long run
A) the quantity of money is determined by banks.
B) the quantity of money serves as a good indicator of how well money functions as a store of value.
C) the quantity of money determines real GDP.
D) an increase in the growth rate of the quantity of money leads to an equal increase in the inflation rate.
D
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Gross domestic product (GDP)
a. always increases over time b. increases only if prices increase because the goods and services are measured in current prices c. increases only if output of good and services increase d. increases only if either prices increase or output increases, but not a combination of both e. increases with either an increase in prices or an increase in output, or a combination of both
When quantity supplied decreases at every possible price, we know that the supply curve has
a. shifted to the left. b. shifted to the right. c. not shifted; rather, we have moved along the supply curve to a new point on the same curve. d. not shifted; rather, the supply curve has become flatter.