In the Equation of Exchange, If the Velocity of Money

question 164

Multiple Choice

In the equation of exchange, if the velocity of money is constant, a 10 percent increase in the money supply must:

• A)increase the price level by 10 percent.
• B)result in a higher level of unemployment.
• C)increase real GDP by 10 percent.
• D)increase nominal GDP by 10 percent.

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Definitions:

Internal Control

Internal control comprises the procedures and processes implemented by a business to safeguard assets, enhance the reliability of accounting records, and promote efficiency.

Authority

The power or right given to an individual or body to make decisions, issue commands, and enforce obedience within a specific scope or area.

Physical Controls

Security measures that are implemented to protect assets, including locks, surveillance cameras, and alarm systems.

Safeguard Assets

Measures or strategies implemented by a company to protect its assets from theft, damage, or misuse.