The Quantity Theory of Money and Prices

question 177

Multiple Choice

The quantity theory of money and prices

• A) is derived from the equation of exchange assuming that prices remain constant.
• B) shows how a change in the price level leads to a change in the money supply.
• C) shows how the demand for money is inversely related to the price level.
• D) is the hypothesis that changes in the money supply leads to proportional changes in the price level.

---

Definitions:

Continents

Large landmasses on Earth's surface, distinguished by convention rather than any strict criteria, typically identified by geographical and cultural factors.

Continental Shield

Large geographical areas composed of ancient, stable, and relatively flat Precambrian rock that form the cores of continents.

Exposed Rocks

Rocks that are visible on the Earth's surface without being covered by soil, vegetation, or other materials.

Accreted Terranes

Pieces of the Earth's crust that have been added to a continent due to plate tectonic forces.