The quantity theory of money implies that the price level will be stable (no inflation or deflation) when the growth rate of the money supply equals
A) 0.
B) the growth rate of the price level.
C) the growth rate of the velocity of money.
D) the growth rate of real GDP.
Answer: D
You might also like to view...
With respect to Friedman's natural rate theory, expansionary monetary policies can
a. move output above the natural rate but leave unemployment at the natural rate in the short-run. b. only affect inflation and not unemployment in the long-run. c. leave output at its natural rate with a simultaneous decrease in the natural rate of employment. d. move output and employment below the natural rate.
In long-run equilibrium for a perfectly competitive firm, price equals which of the following?
a. Economies of real cost. b. Maximum total revenue. c. Diseconomies of scale cost. d. Minimum point on the long-run average cost curve.