A Key Problem with the Basic Quantity Theory of Money

question 43

Multiple Choice

A key problem with the basic quantity theory of money is that it

• A)did not apply to money in its role as a medium of exchange.
• B)failed to explain completely actual changes in real money balances.
• C)assumed that prices did not change.
• D)assumed that the stock of money did not change.

---

Definitions:

Temperate Desert

A type of desert found in temperate climates, characterized by relatively low temperatures compared to tropical deserts.

Climax Community

The final, stable community in succession that remains relatively unchanged until disrupted by an event like fire or human interference.

Forest Communities

Ecosystems composed of trees and other plant species, along with associated animals, microorganisms, and the physical environment, interacting as a unit.

Succession

The process by which ecosystems change and develop over time, often following a disturbance.