One Assumption That Changes the Equation of Exchange into the Quantity

question 28

Multiple Choice

One assumption that changes the equation of exchange into the quantity theory of money is:

• A)velocity remains constant.
• B)real output varies with the money supply.
• C)expectations change with inflation.
• D)price times quantity equals nominal output.

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Definitions:

Financial Resources

Funds available to a person or organization for spending in the form of cash, liquid securities, and credit lines.

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The environmental and cultural settings that influence the behaviors, perceptions, and interactions of individuals within a society.