According to the Simple Quantity Theory of Money,if the Money

question 106

Multiple Choice

According to the simple quantity theory of money,if the money supply falls by 20 percent,

• A) the price level will fall by 20 percent.
• B) Real GDP will rise by less than 20 percent.
• C) GDP will fall by 20 percent.
• D) velocity will rise.
• E) a and c

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Definitions:

Hurdle Rate

The minimum acceptable rate of return on an investment that a manager or company would consider in order to pursue the project.

Accounting Rate of Return

A financial ratio that measures the expected profit from an investment compared to its initial cost.

After-Tax Net Income

The profit remaining after all operating expenses, including taxes, have been deducted from total revenue.

Annual Investment

The amount of money invested in a particular asset or project on a yearly basis.