Given: M = 800, V = 6, P = 4, and Q = 1,200. According to the crude quantity theory of money, if M rises to 1,000, how much would V, P, and Q be?
What will be an ideal response?
P would rise (by 25%) to 5; V would remain at 6; Q would remain at 1,200.
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A particularly severe or protracted recession is called a(n):
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