Assume Monetary Equilibrium Exists; That Is, the Desired and Actual

question 89

Multiple Choice

Assume monetary equilibrium exists; that is, the desired and actual supply of money are equal. Also assume that nominal GDP equals $960 billion and the money supply is $160 billion. From a strict
Monetarist view, an increase in the money supply by $12 billion will increase nominal GDP by

• A) $13 billion.
• B) $24 billion.
• C) $72 billion.
• D) $80 billion.

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Definitions:

Net Operating Income

The income earned by a business through its core operations, not including taxes and interest expenses.

Unit Sales

This term refers to the quantity of individual items sold or expected to be sold.

Price Increase

is the rise in the selling price of goods or services, often due to factors like inflation, increased production costs, or higher demand.

Traceable Fixed Expense

Fixed costs that can be directly associated with a specific segment, product line, or department within a company.