The Classical Economists Believed That If the Quantity of Money

question 66

Multiple Choice

The classical economists believed that if the quantity of money doubled

• A)output would double.
• B)prices would fall.
• C)prices would double.
• D)prices would remain constant.

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Definitions:

Contra Account

An account used in financial reporting to reduce the value of a related account when the two are netted together.

Effective Interest Rate

The actual return on an investment or cost of a loan considering the effect of compounding interest, distinct from the nominal rate.

Contract Interest Rate

The interest rate specified in a loan or bond agreement, which determines the amount of interest the borrower will pay over the term of the loan.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its legal value.