The quantity theory of money predicts that, in the long run, inflation results from the
A) money supply growing at a faster rate than real GDP.
B) velocity of money growing at a faster rate than real GDP.
C) velocity of money growing at a lower rate than real GDP.
D) money supply growing at a lower rate than real GDP.
A
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Last week, six Swedish kronor could purchase one U.S. dollar. This week, it takes eight Swedish kronor to purchase one U.S. dollar. This change in the value of the dollar will ________ exports from the United States to Sweden and ________ U.S
aggregate demand. A) increase; decrease B) decrease; increase C) decrease; decrease D) increase; increase
Assume a factory that currently employs 25 workers is considering adding another 5 workers to its payroll. Economists would classify this as:
A) a short-run decision. B) a long-run decision. C) neither a short-run nor a long-run decision. D) both a short-run and a long-run decision.