According to classical economists, if we use the quantity theory of money equation P = MV / Q, and the growth rate of M equals the Q growth rate,
a. the price level increases
b. the price level decreases
c. the price level remains unchanged
d. velocity is necessarily increased
e. M1 is decreased
C
You might also like to view...
Real GDP per person in Westland is $30,000, while real GDP in Eastland is $10,000, Westland's real GDP per person is growing at 3 percent per year and Eastland's real GDP per person is growing at 3 percent per year. If these growth rates persist indefinitely, then:
A. Eastland's real GDP per person will rise until it equals Westland's real GDP per person. B. Eastland's real GDP per person will eventually be greater than Westland's. C. Westland's real GDP per person will always be at least $20,000 greater than Eastland's. D. Eastland's real GDP per person will always be exactly $20,000 less than Westland's.
Explain whether the statement, "There is life on Mars," is a normative or positive statement
What will be an ideal response?
Suppose Bella had entered into a contract to rent Michelle's apartment for one year. The contract mentioned that if either of the two parties breached it, the other was to recover her loss. If Michelle breaches the contract, a payment which leaves Bella no worse off than if the contract was honored, is called opportunistic damage
Indicate whether the statement is true or false
Which of the following best describes how an increase in the money supply shifts aggregate demand?
A. The money supply shifts right, prices fall, spending increases, and aggregate demand shifts right. B. The money supply shifts right, the interest rate falls, investment increases, and aggregate demand shifts right. C. The money supply shifts right, prices rise, spending falls, and aggregate demand shifts left. D. The money supply shifts right, the interest rate rises, investment decreases, and aggregate demand shifts left.