According to the Quantity Theory of Money, an Increase in Money

question 101

Multiple Choice

According to the quantity theory of money, an increase in money supply causes an increase in:

• A) production.
• B) velocity of money.
• C) real GDP.
• D) prices.

---

Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of another entity, but not control those policies, typically associated with ownership of 20% to 50% of voting shares.

Net Income

The total earnings of a company after subtracting all expenses from revenues, including taxes and operating expenses.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the investee's profits or losses.

Journal Entries

The basic way to record financial transactions in double-entry bookkeeping, involving debits and credits in accounting records.