According to the quantity theory of money, if the quantity of goods and services doubles within the economy while velocity is constant and the money supply is cut in half, then the price level will be
a. unaffected
b. four times higher
c. times higher
d. one-half its previous level
e. one-fourth its previous level
A
You might also like to view...
As part of the "wealth channel of monetary policy," a higher money supply __________ interest rates and thus __________ bond prices
A) raises; raises B) raises; lowers C) lowers; raises D) lowers; lowers
Rent controls are an example of a
A) price floor. B) price ceiling. C) price floor for the consumer and a price ceiling for the producer. D) nonprice rationing device.
In the short run, a perfectly competitive firm can earn: a. positive economic profits. b. zero economic profits
c. negative economic profits. d. any of the above.
The French expression used by free-market advocates, which literally translates as "allow them to do," is
a. laissez-faire. b. je ne sais pas. c. si'l vous plait. d. tête-à-tête.