The Quantity Theory of Money Argues That, in the Long

question 248

Multiple Choice

The quantity theory of money argues that, in the long run, the percentage change in money will create an equal percentage change in

• A) velocity.
• B) real GDP.
• C) potential GDP.
• D) the price level.

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Definitions:

Expectancy

The degree to which individuals believe that their effort will lead to effective performance and, consequently, a desired outcome.

Effort

The expenditure of physical or mental energy toward the accomplishment of a task or goal.

Valence

In psychology, refers to the intrinsic attractiveness or aversiveness of an event, object, or situation.

Range

denotes the extent or scope of something, often referring to the difference between the highest and lowest values in a set of data or the variety within a category.