The Quantity Equation for Money, by Itself

question 31

Multiple Choice

The quantity equation for money, by itself:

• A)may be thought of as a definition for velocity.
• B)implies that the velocity of money is constant.
• C)implies that the price level is proportional to the money supply.
• D)implies that real gross domestic product (GDP) is proportional to the money supply.

---

Definitions:

Fraction

A mathematical expression representing the division of one quantity by another, noted by a numerator divided by a denominator.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a resource or input.

Marginal Cost

The additional cost of producing one more unit of a good or service.

Competitive Labor Market

A market where numerous employers are actively seeking to hire and numerous individuals are seeking employment, with wages determined by the supply and demand for labor.