According to the Equation of Exchange, the Long-Run Effect of a Doubling

question 222

Multiple Choice

According to the equation of exchange, the long-run effect of a doubling of the money supply would be that

• A) both prices and real GDP double.
• B) the economy grows with little inflation.
• C) the price level is halved and real GDP doubles.
• D) prices double and real GDP is unchanged.

---

Definitions:

Electrical Cord

A flexible cable comprised of one or more electrical conductors, typically encased in insulation, used to transmit power.

Nodes of Ranvier

Nodes of Ranvier are gaps in the myelin sheath of nerve fibers where axonal membranes are exposed, enabling rapid transmission of nerve impulses.

Myelin

A fatty white substance that surrounds the axon of some nerve cells, forming an electrically insulating layer that speeds the transmission of nerve impulses.

Axon

A long, slender projection of a nerve cell that typically conducts electrical impulses away from the neuron's cell body.