According to the Quantity Theory of Money, in the Long

question 186

Multiple Choice

According to the quantity theory of money, in the long run, an increase in the quantity of money results in an equal percentage increase in

• A) the price level.
• B) the growth rate of real GDP.
• C) the inflation level.
• D) the growth rate of potential GDP.

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Definitions:

Total Rate of Return

A profitability measure that accounts for the gains or losses from investments over a specific period, including interest, dividends, and capital gain.

Current Yield

The annual income (interest or dividends) divided by the current price of the security.

Yield to Maturity

The total return anticipated on a bond if the bond is held until the end of its lifetime.

Common Stock Dividends

Payments made to shareholders of a company's common stock, usually from the company's earnings.