Using the Equation of Exchange,the Existence of a Natural Rate

question 16

Multiple Choice

Using the equation of exchange,the existence of a natural rate of unemployment implies that in the long run:

• A)Velocity in the equation of exchange is actually very unstable.
• B)Monetary policy affects only the rate of inflation.
• C)Quantity of real output in the equation of exchange varies in proportion to money supply.

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Definitions:

Irritability

A psychological and physiological state characterized by increased sensitivity and tendency to become easily upset or annoyed.

Increased Blood Pressure

A condition where the force of the blood against the artery walls is too high, often leading to various health problems.

Substance Abuse

The harmful or hazardous use of psychoactive substances, including alcohol and illicit drugs, leading to addiction or dependence.

Behavioral Effect

The impact of actions or conditions on the behavior of individuals or groups.