If the Money Supply Is $6,000,velocity Is 5,and Real GDP

question 98

Multiple Choice

If the money supply is $6,000,velocity is 5,and Real GDP is 10,000 units of output,then the price level is _____________.If the money supply doubled over a short time period to $12,000,the simple quantity theory of money would predict that _____________________.

• A) $3; the price level would double
• B) $3; Real GDP would double
• C) $3; the price level would be cut in half
• D) $2; the price level would double

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Definitions:

Sodium Hydroxide

A highly caustic compound, also known as lye, used in many industrial and chemical processes.

Lye

A strong alkaline solution, often sodium or potassium hydroxide, used in cleaning, soap making, and food preparation.

Acid Base

Refers to the mechanisms the body uses to maintain its normal acidic (pH less than 7) or basic (pH greater than 7) environment.

Boric Acid

A weak, water-soluble acid used as an antiseptic, insecticide, and flame retardant, among other applications.