Since, in Classical Economic Theory, Both the Velocity of Money

question 56

Multiple Choice

Since, in classical economic theory, both the velocity of money and real output are assumed to be stable,

• A) Changes in the quantity of money explain changes in the price level.
• B) Changes in the quantity of money explain changes in real GDP.
• C) Changes in the money supply cause changes in the velocity of money.
• D) Prices are fixed.

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Definitions:

Just Compensation

The fair payment required to be given to a property owner when their property is taken for public use, under eminent domain.

Self-Incrimination

The act of exposing oneself to prosecution by being forced to respond to questions or by providing evidence in a legal proceeding.

Fifth Amendment

The Fifth Amendment refers to a part of the United States Constitution that provides several protections to individuals, including rights against self-incrimination and double jeopardy, and the assurance of due process.

Establishment Clause

One of two provisions in the First Amendment of the U.S. Constitution that protect citizens’ freedom of religion. It prohibits (1) the establishment of a national religion by Congress and (2) the preference of one religion over another or of religion over nonreligious philosophies in general.