The quantity theory of money asserts that an increase in the quantity of money
A) will decrease the price level by an offsetting amount.
B) by n percent will lead to an increase in the price level by n + 1 percent.
C) will lead to an equal percentage increase in real GDP.
D) will lead to an equal percentage increase in the price level.
D
You might also like to view...
From a macroeconomic perspective, the problem of low household saving has probably been overstated because:
A. household saving represents a smaller share of national saving than does public saving. B. it is national saving, not household saving, that allows an economy to accumulate new capital. C. household saving is not related at all to an economy's ability to accumulate new capital. D. household saving has been increasing steadily over the last three decades.
If the nominal interest rate is 2.9 percent and the rate of inflation is 0.6 percent in a given year, then what is the corresponding real rate of return?
A) 3.5 percent B) 2.3 percent C) -3.5 percent D) None of the above.
In years when teenagers become a greater percentage of the labor force,
A) the natural rate of unemployment falls. B) the natural rate of unemployment rises. C) the inflation rate rises. D) the inflation rate falls.
The prisoner's dilemma provides an explanation for
a. the price wars that sometimes occur in oligopolies b. the ability of firms in an oligopoly to extract the entire consumer surplus c. the collusive behavior that sometimes occurs in an oligopoly d. the failure of firms in non-competitive industries to maximize profits e. an irrational behavior that occurs in competitive markets