According to the quantity theory of money, if an economy produces 100 units of output and has a money supply equal to $500, then if the money supply doubles while velocity remains constant, the new price level will:
a. fall to half its initial level.
b. fall, but it will not fall all the way to half its initial level.
c. increase, but it will not double.
d. double.
e. more than double.
d
You might also like to view...
Since 1900, real GDP per capita in the United States has ________ in the short run and has ________ in the long run
A) fluctuated; displayed a strong upward trend B) remained fairly stagnant; grown considerably C) decreased more often than it has increased; increased more often than it has decreased D) grown at a stable and consistent rate; wildly fluctuated
A country has a trade deficit. Its
a. net capital outflow must be positive, and saving is larger than investment. b. net capital outflow must be positive and saving is smaller than investment. c. net capital outflow must be negative and saving is larger than investment. d. net capital outflow must be negative and saving is smaller than investment.
In order to practice price discrimination, a firm must:
A. avoid detection by the government. B. be able to divide consumers into groups with different demands for their product. C. have a homogeneous product. D. advertise their product.
Organizing a successful firm in a market economy has become ________ over the last century
A) legally impossible B) politically impossible C) less difficult D) more difficult