According to the Equation of Exchange, the Long-Run Effect of a Doubling

question 222

Multiple Choice

According to the equation of exchange, the long-run effect of a doubling of the money supply would be that

• A) both prices and real GDP double.
• B) the economy grows with little inflation.
• C) the price level is halved and real GDP doubles.
• D) prices double and real GDP is unchanged.

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Definitions:

Anxious

A feeling of worry, nervousness, or unease about something with an uncertain outcome.

Distributive Negotiation

A negotiation strategy where parties view resources as fixed and strive to maximize their share of the resources.

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The ability to produce original and valuable ideas or solutions.

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