If the Velocity of Money Is Constant, Then

question 175

Multiple Choice

If the velocity of money is constant, then

• A) a change in nominal GDP can be caused only by a change in the money supply.
• B) a change in the money supply can be caused only by a change in the price level.
• C) a change in the money supply is negatively related to a change in nominal GDP.
• D) a change in the money supply would result in no change in nominal GDP.

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Definitions:

Purchase Method

An accounting technique used to consolidate the financial statements of two companies when one company acquires another.

Total Assets

The sum of all assets owned by a company, including cash, investments, property, and equipment, representing the total resources available for use in its operations.

Value of Synergy

The additional value created by combining two companies or entities, where the performance and financial results of the merged entity are greater than the sum of the separate individual parts.

Equations

Mathematical statements expressing the equivalence between two expressions, containing one or more variables.