The More Sophisticated Version of the Quantity Theory of Money

question 38

Multiple Choice

The more sophisticated version of the quantity theory of money differs from the crude quantity theory by assuming that

• A) the circulation velocity of money is constant.
• B) the economy does not always operate at a full-employment level of GDP.
• C) fiscal policy is the primary means of stimulating the economy.
• D) the money supply has no effect on the price level.
• E) controlling inflation is more important than reducing unemployment.

---

Definitions:

Criticisms

Evaluations or judgments expressed about something, pointing out its faults or shortcomings often with the intention of promoting improvement.

Continuity Theory

A psychological theory suggesting that individuals tend to maintain the same activities, behaviors, personalities, and relationships as they age.

Connected

Being joined or linked in some manner, either physically, emotionally, or digitally, implying a state of unity or association.

Past

The past refers to the period of time that has already occurred, in contrast to the present and the future.