Which of the Following Reflects the Basic Concept of the Equation

question 26

Multiple Choice

Which of the following reflects the basic concept of the equation of exchange?

• A) MV = PY
• B) Change in equilibrium real GDP = Change in autonomous spending × 1/(1 - MPC)
• C) Potential change in M1 = Change in excess reserves × (1/r)
• D) Unemployment rate = Number of unemployed / Number in labor force

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