According to the Quantity Theory of Money, If an Economy

question 104

Multiple Choice

According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:

• A) $0.13.
• B) $1.25.
• C) $8.
• D) $200.
• E) $8,000.

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Definitions:

Higher-order Conditioning

A learning process in which a stimulus that was previously neutral is paired with a conditioned stimulus to produce the same conditioned response as the original conditioned stimulus.

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is associated with an unconditioned stimulus.

Spontaneous Recovery

The reappearance of conditioned responses after a period of rest and without further conditioning.

Waterfowl

Aquatic birds that are typically found in freshwater or sea near coastlines, including ducks, geese, and swans.