If we assume that velocity is constant, and if the money supply increases by 6 percent, we would expect, ceteris paribus, that the price level would

A) increase by 3 percent.
B) increase by 6 percent.
C) decrease by 3 percent.
D) decrease by 6 percent.


B

Economics

You might also like to view...

A monopoly is characterized by all of the following except

A) the firm has market power. B) there are no close substitutes to the firm's product. C) there are only a few sellers, each selling a unique product. D) entry barriers are high.

Economics

Explain how an economy which is presently above its balanced growth path will converge back to its balanced growth path?

What will be an ideal response?

Economics

The above figure shows a payoff matrix for two firms, A and B, that must choose between selling basic computers or advanced computers. Firm B's dominant strategy

A) is to make basic computers. B) is to make advanced computers. C) is to adopt firm A's strategy. D) does not exist in this game.

Economics

Which of the following is not a result of binding government price controls?

A) Some people win and some people lose. B) Price controls benefit poor consumers but harm producers and wealthy consumers. C) Price controls decrease economic efficiency. D) A deadweight loss will occur.

Economics