According to the assumptions of the quantity theory of money, if the money supply increases 5 percent, then
a. both the price level and real GDP would rise by 5 percent.
b. the price level would rise by 5 percent and real GDP would be unchanged.
c. the price level would be unchanged and real GDP would rise by 5 percent.
d. both the price level and real GDP would be unchanged.
b
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Household production consists of households producing goods and services, like meals, cleaning and child care, instead of firms
a. True b. False
A normal good is defined as one
a. having a downward-sloping demand curve b. that is neither a luxury nor a basic good c. that is bought by consumers with normal tastes d. whose demand increases when incomes increase e. whose demand decreases when incomes increase
Suppose that the exchange rate between the U.S. dollar and the Mexican peso starts out at $0.11 per peso. If the exchange rate then changes to $0.13 per peso, there will be a(n) __________ in the quantity demanded of dollars by Mexicans, and therefore there will be a(n) __________ in the quantity supplied of pesos to the foreign exchange market
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
Which of the following statements is NOT true of GDP?
A. GDP excludes nonmarket production. B. GDP is the value of final goods and services produced in the economy. C. GDP is not a measure of a nation's overall welfare. D. There are no significant weaknesses in using GDP as a measure of the nation's economic performance.