Consider the Equation $\Delta$ M $\Delta$ V $\approx$ $\Delta$ P +

question 158

Multiple Choice

Consider the equation % $\Delta$ M +% $\Delta$ V $\approx$ % $\Delta$ P + % $\Delta$ Y.If the velocity of money does not change (% $\Delta$ V= 0) ,and the change in real GDP exactly keeps pace with the change in the money supply (% $\Delta$ M = % $\Delta$ Y) ,what will happen to the price level (P) ?

• A) It will go up,%\(\Delta\)P\(\gt\)0.
• B) It will go down,%\(\Delta\)P \(\lt\) 0.
• C) It will stay the same,%\(\Delta\)P = 0.
• D) It will equal the sum %\(\Delta\)M+%\(\Delta\)Y.
• E) It will drop out of the equation.

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Definitions:

Earmarks

Provisions within legislation that allocate funds for specific projects, often without proper review or competition.

Specifically Designated

Refers to items, locations, or statuses that have been identified and chosen for a special purpose or assignment.

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Wide-ranging laws or statutes that address multiple aspects of a particular issue or area of public policy.

Regulatory Capture

The situation that occurs when a governmental regulatory agency ends up being controlled by the industry that it is supposed to be regulating.