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

question 167

Multiple Choice

Assume monetary equilibrium exists-that is, the desired and the actual supply of money are equal -when nominal GDP equals $480 billion and the money supply is $160 billion. According to a strict
Monetarist view, an increase in the money supply of $10 billion will increase the nominal GDP by

• A) $30 billion.
• B) $25 billion.
• C) $20 billion.
• D) $10 billion.

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