The View That Velocity Is Constant in the Short Run

question 92

Multiple Choice

The view that velocity is constant in the short run transforms the equation of exchange into the quantity theory of money. According to the quantity theory of money,when the money supply doubles

• A)velocity falls by 50 percent.
• B)velocity doubles.
• C)nominal incomes falls by 50 percent.
• D)nominal income doubles.

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Definitions:

Nominal

Relating to data that can be categorized but not ranked; involves naming or labeling categories.

Interval

A range or distance between two points or values, often referring to time or space.

Level Of Measurement

The classification of a variable depending on how its values can be measured or categorized, such as nominal, ordinal, interval, or ratio.

Nominal

Pertaining to data classified into mutually exclusive categories without any order or rank.