The quantity theory of money of the Classical economists says that a change in the money supply will produce a:
A. proportional change in the price level.
B. greater than proportional change in the price level.
C. less than proportional change in the price level.
D. wide variation in the velocity of money.
Answer: A
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During the Kennedy administration, what did economist Walter Heller propose to bring the economy back to full employment?
A) tariffs on imported goods B) a large government works program C) tax cuts D) insourcing
Distinguish the terms price ceiling and price floor.
What will be an ideal response?
In a study published in 1963, Milton Friedman and Anna Schwartz found that in every business cycle they studied over nearly a hundred-year period, the growth rate of the ________ decreased before ________ decreased
A) money supply; interest rates B) money supply; output C) budget deficit; interest rates D) budget deficit; output
If the nominal money supply grows 5%, real income falls 2%, and the income elasticity of money demand is 0.8, then the inflation rate is
A) 3.0%. B) 3.4%. C) 6.6%. D) 7.0%.