According to the Quantity Theory of Money, a Ten Percent

question 8

Multiple Choice

According to the quantity theory of money, a ten percent increase in the nominal money supply will lead to

• A)a ten percent increase in the real money supply
• B)a ten percent increase in real output
• C)a ten percent decrease in the interest rate
• D)a ten percent increase in the price level
• E)an offsetting decrease in the velocity of money

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