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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