If the money supply is $20,000, velocity is 3, and Real GDP is 5,000 units of output, then the price level is _____________. If the money supply doubled over a short time period to $40,000, the simple quantity theory of money would predict that _____________________.

A. $12; the price level would double
B. $6; Real GDP would double
C. $12; the price level would be cut in half
D. $6; the price level would double


Ans: A. $12; the price level would double

Economics

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