According to the Quantity Theory of Money, If M's Growth

question 30

Multiple Choice

According to the quantity theory of money, if M's growth is lower than Q's, then:

• A) V falls.
• B) V rises.
• C) P stays the same
• D) P falls.
• E) P rises

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Definitions:

Downward Shift

In economics, refers to a decline in the position of a demand or supply curve on a graph, indicating a decrease in quantity demanded or supplied at any given price.

Keynes

An economist who advocated for government intervention in markets to mitigate the adverse effects of economic recessions and depressions through fiscal and monetary policies.

Government Spending

Expenditures made by the public sector on goods and services such as healthcare, education, and defense, which can impact the country's economy.

Federal Budget Deficit

The shortfall where the federal government's expenditures exceed its revenues in a given fiscal year.