If Money Is Neutral and Velocity Is Stable, What Does

question 173

Multiple Choice

If money is neutral and velocity is stable, what does an increase in the money supply create a proportional increase in?

• A) real output
• B) both real and nominal interest rate
• C) inflation rate
• D) the price level

---

Definitions:

Pro Forma Financial Statements

Pro forma financial statements are financial reports that project the future financial performance of a company, often using assumptions or hypothetical scenarios.

Sales Forecast Assumption

The underlying conditions and criteria used to project future sales for a business.

Debt-Equity Ratio

A metric that highlights the use of equity versus debt in the strategic funding of company assets.

Dividend Payout Ratio

A financial ratio that measures the proportion of earnings a company pays out to its shareholders in the form of dividends.