The Quantity Theory of Money of the Classical Economists Says

question 45

Multiple Choice

The quantity theory of money of the Classical economists says that a change in the money supply will produce a:

• A) proportional change in the price level.
• B) greater than proportional change in the price level.
• C) less than proportional change in the price level.
• D) wide variation in the velocity of money.

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Definitions:

Product Demand

The desire and willingness of consumers to purchase a particular good or service at a given price.

Oligopoly

A market structure characterized by a few firms dominating the industry, leading to limited competition and potentially higher prices for consumers.

Pure Competition

A market scenario where numerous sellers offer homogenous products, making the market highly competitive.

Differentiated Oligopoly

A market structure where a few firms dominate the industry but offer products that are distinct in some aspect, leading to non-price competition among them.