According to the Classical Dichotomy, When the Money Supply Doubles

question 168

Multiple Choice

According to the classical dichotomy, when the money supply doubles, what also doubles?

• A) the real prices
• B) the nominal interest rate
• C) the real GDP
• D) the nominal GDP

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Definitions:

Equity Financing

The method of raising capital by selling company shares to investors, thereby exchanging ownership rights for cash investments.

Tax Deductible

Tax Deductible refers to certain expenses that individuals or businesses can subtract from their gross income to reduce the amount of taxable income.

Market Values

The present cost at which a product or service may be purchased or sold in an open market.

Par Value

The face value of a stock or bond, representing the nominal or dollar value assigned when issued.