If velocity were constant, as assumed by the pre-Keynesian version of the quantity theory, then a 10% change in the money supply would cause
A) a proportionate change in prices.
B) a proportionate change in output.
C) the sum of proportionate change in P and Y equals 10%.
D) the net difference of proportionate change in P and Y equals 10%.
C
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Following the balance of payments ________.
A. allows us to track changes in trade flows, but not financial assets B. is useful for understanding a country's relationships with its trading partners C. is not helpful because the balance of payments is always zero D. helps predict when an economy will be in a recession
Globalization has most likely occurred for which of the following reasons?
a. International agreements and treaties between countries have encouraged greater trade. b. Expanding cultural connections between people around the world. c. Expanding economics connections between people around the world. d. Increased military spending.
Which of the following will tend to retard the growth and prosperity of a country?
a. imposition of price controls and regulations that restrain domestic and international trade b. an expansionary monetary policy that leads to high rates of inflation c. high marginal tax rates d. all of the above
Why are checking account balances included in the M1 definition of the money supply?
A. Checking account balances are a traditional form of money that predates paper money. B. Checking account balances are used to make so many payments. C. Checking account balances are backed by gold and silver. D. Checking account balances pay interest.