The Quantity Theory of Money Predicts That

question 474

Multiple Choice

The quantity theory of money predicts that

• A) in the short run, a 10 percent increase in the quantity of money leads to a 10 percent increase in velocity.
• B) in the long run, a 10 percent increase in the quantity of money leads to a 10 percent increase in velocity.
• C) in the long run, a 10 percent increase in the quantity of money leads to a 10 percent increase in real GDP.
• D) in the long run a 10 percent increase in the quantity of money leads to a 10 percent increase in the price level.

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