Since Classical Economists Believe That Both V and Q Are

question 76

Multiple Choice

Since classical economists believe that both V and Q are constants for an economy in short-run equilibrium, the equation of exchange becomes a theory in which:

• A) the quantity of money explains prices.
• B) the quantity of money explains velocity.
• C) the quantity of money explains real GDP.
• D) changes in M cause changes in V.
• E) prices are never flexible

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