Consider the Equation $\Delta$ M $\Delta$ V $\approx$ $\Delta$ P +

question 158

Multiple Choice

Consider the equation % $\Delta$ M +% $\Delta$ V $\approx$ % $\Delta$ P + % $\Delta$ Y.If the velocity of money does not change (% $\Delta$ V= 0) ,and the change in real GDP exactly keeps pace with the change in the money supply (% $\Delta$ M = % $\Delta$ Y) ,what will happen to the price level (P) ?

• A) It will go up,%\(\Delta\)P\(\gt\)0.
• B) It will go down,%\(\Delta\)P \(\lt\) 0.
• C) It will stay the same,%\(\Delta\)P = 0.
• D) It will equal the sum %\(\Delta\)M+%\(\Delta\)Y.
• E) It will drop out of the equation.

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Definitions:

Resistance

The property of a material or circuit that opposes the flow of electric current, converting electrical energy into heat.

Applied

In general context, "applied" refers to something that has been put to practical use or implemented in a real-world scenario, as opposed to being theoretical.

Engineering Notation

A version of scientific notation in which powers of ten are used, and the exponent is a multiple of three.

Prefix

A syllable or group of syllables added at the beginning of a word to alter its meaning or create a new word, often used in units of measurement.