If the Velocity of Money Is Constant, Then a 2

question 105

Multiple Choice

If the velocity of money is constant, then a 2% increase in the money supply

• A) must be the result of a 2% increase in the price level.
• B) would change nominal GDP by a smaller percentage.
• C) would change nominal GDP by an equal percentage.
• D) would change nominal GDP by a larger percentage.

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Definitions:

Hypothesis

A testable statement about the nature of an observation or relationship. Compare with scientific theory.

Decomposers

Microbial heterotrophs that break down dead organic material and use the decomposition products as a source of energy. Also called saprotrophs or saprobes.

Ecosystem

A community of living organisms in conjunction with the nonliving components of their environment, interacting as a system.

Available Nutrients

Nutrients present in the environment that can be readily absorbed and used by organisms for growth and metabolism.