Using the Equation of Exchange,if Real Output Increases by 5

question 13

Multiple Choice

Using the equation of exchange,if real output increases by 5 percent per year and velocity is stable,in order to keep the price level stable

• A)The interest rate must increase by 5 percent per year.
• B)Velocity must increase by 5 percent per year.
• C)The money supply must increase by 5 percent per year.
• D)The money supply must increase by more than 5 percent per year because nominal output is greater than 5 percent.

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Definitions:

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The process by which oxygen is absorbed by the blood stream in the lungs and transported to the tissues throughout the body.

Mean Square

The average of the squares of the deviations or differences from the mean, often used in the context of analysis of variance (ANOVA).

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