If Velocity Is Constant in the Long Run, Which of the Following

question 25

Multiple Choice

If velocity is constant in the long run, which of the following results flow from the quantity theory of money?

• A) A change in the money supply changes real GDP by an equal percentage.
• B) A change in the money supply changes nominal GDP by an equal percentage.
• C) A change in the money supply changes real interest rates by an equal percentage.
• D) A change in the money supply changes consumer lending by an equal percentage.

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Definitions:

Negative Reinforcer

A stimulus whose removal or avoidance following a behavior increases the likelihood of that behavior being repeated in the future.

Stockbroker

A financial professional who buys and sells stocks and other securities for clients, typically in exchange for a fee or commission.

Reduces Stress

The effect of lowering psychological or physiological strain or tension typically through various strategies or interventions.

Negative Reinforcer

A stimulus whose removal following a behavior increases the likelihood of that behavior being repeated.