Assuming Velocity of Circulation Is Constant, a 10 Percent Increase

question 211

True/False

Assuming velocity of circulation is constant, a 10 percent increase in the quantity of money leads to a 10 percent increase in nominal GDP in both the short run and the long run.

---

Definitions:

Entry Record

The documented recording of a financial transaction in an accounting system.

Sales and Sales Taxes

Revenue from goods or services sold, and the tax collected on these sales, which is remitted to the government.

Gross Earnings

The total income earned by a business before deductions such as taxes, expenses, and costs.

Net Pay

The take-home pay an employee receives after deductions such as taxes and retirement contributions.