The quantity theory of money tells us that real money balances are proportional to income, since ________

A) velocity is assumed constant in the short run
B) the supply and demand of money are equal in equilibrium
C) changes in the quantity of money lead to proportional changes in the price level
D) all of the above
E) none of the above

D

Economics

You might also like to view...

The major economic problem is to:

a. provide for full employment. b. eliminate scarcity. c. increase the standard of living. d. allocate limited resources among unlimited uses. e. increase leisure.

Economics

The Index of Economic Freedom measures: a. market orientation

b. market concentration. c. price elasticity. d. market power.

Economics