If You Believe That Velocity Is Constant and That the Aggregate

question 126

Multiple Choice

If you believe that velocity is constant and that the aggregate supply curve is horizontal, then the quantity theory of money would predict that a doubling of the money supply would cause a doubling of the

• A)price level and real output.
• B)price level.
• C)price level and no change in real output.
• D)real output.

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Definitions:

Caveat Emptor

A Latin phrase meaning "let the buyer beware," indicating that the buyer assumes the risk regarding the quality and condition of the item purchased.

Sales Contract

A legal agreement between a buyer and a seller specifying the terms and conditions of the sale of goods or services.

Strict Product Liability

A legal doctrine that makes manufacturers, distributors, or sellers liable for any defects in the products they market, regardless of fault or negligence.

Defective

Describes something that is flawed or lacking in some essential component, often leading to malfunction or failure.