If Velocity Is Constant in the Long Run, Which of the Following

question 25

Multiple Choice

If velocity is constant in the long run, which of the following results flow from the quantity theory of money?

• A) A change in the money supply changes real GDP by an equal percentage.
• B) A change in the money supply changes nominal GDP by an equal percentage.
• C) A change in the money supply changes real interest rates by an equal percentage.
• D) A change in the money supply changes consumer lending by an equal percentage.

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Definitions:

Nonverbal Indicators

Communication cues that do not involve the spoken word, but convey meaning through body language, facial expressions, and other physical behaviors.

Proper Timing

Choosing the right moment to perform or execute an action for optimal results.

Mental Condition

A term that encompasses various psychological states, disorders, and illnesses affecting a person's thinking, emotional state, and behavior.

Active Listening

A method of listening that involves paying full attention to the speaker, understanding their message, and responding thoughtfully.