Answer This Question Based on the Diagram and the Equation

question 206

Multiple Choice

Answer this question based on the diagram and the equation of exchange. Assume that the velocity of money is constant at 4. Suppose that the increase of aggregate supply from A AS₁ to AS₂ indicates
the economy's average increase in real output per year. According to monetarists, the proper monetary rule for price stability would be to increase the money supply by

• A) zero percent per year.
• B) 4 percent per year.
• C) 10 percent per year.
• D) 30 percent per year.

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Definitions:

Reuptake

The process by which neurotransmitters are taken back into the neuron after being released into the synapse, effectively stopping their action on adjacent neurons.

Neurotransmitters

Chemical substances that carry signals from one neuron to another.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, responsible for processing and sending out nervous signals.

Spinal Cord

The long, thin, tubular structure made up of nervous tissue, which extends from the medulla oblongata in the brainstem to the lumbar region of the vertebral column.