According to the quantity theory of money:
a. the velocity of money is highly variable.
b. the money supply directly affects real GDP.
c. the money supply inversely affects velocity.
d. real GDP increases as the price level increases.
e. P = MV/Q.
e
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If the price of hair styling increases, then
A) hair styling salons hire fewer workers but makes more profit. B) hair stylists demand an increase in wages and the salons hire fewer workers. C) the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts leftward. D) the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts rightward.
Suppose the demand for money becomes less sensitive to changes in the interest rate
In moving along an LM curve, an increase in income must be accompanied by a ________ change in the interest rate than before, meaning that the LM curve has become ________. A) greater, steeper B) greater, flatter C) smaller, steeper D) smaller, flatter