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.

Recognize the pros and cons of economic strategies like privatization, export promotion, and import substitution for developing economies.

Assess the benefits and challenges associated with migration for poor countries.

Comprehend the impact of international and domestic policies on economic development, including trade restrictions and macroeconomic strategies.

Identify the importance of natural resources and human capital in the economic development of a country.

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Definitions:

The Spacing Effect

A phenomenon in psychology where learning is more effective when study sessions are spaced out over time, rather than crammed into one session.

Long-Term Potentiation

A long-lasting increase in synaptic strength between two neurons, thought to be a biological mechanism underlying learning and memory.

Synaptic Basis

The fundamental mechanisms of how neurons communicate with each other through synapses.

Priming

A psychological principle whereby exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance or intention.