Which of the Following Is True Regarding the Quantity Theory

question 383

Multiple Choice

Which of the following is true regarding the quantity theory of money?
I. The theory predicts that in the long run the inflation rate equals the money growth rate minus the growth rate of real GDP.
II. The theory predicts that countries with high growth rates of money will have high inflation rates.
III. The theory predicts that increases in the growth rate of velocity lowers the inflation rate.

• A) I and II
• B) II and III
• C) I and III
• D) I, II and III

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Definitions:

Electromagnetic Spectrum

The range of all types of electromagnetic radiation, including visible light, radio waves, X-rays, and gamma rays.

Wavelength

Wavelength refers to the distance between successive peaks (or troughs) of a wave, especially in physics, indicating the physical property of a wave that influences color and pitch in light and sound waves, respectively.

Amplitude

The extent of a vibratory movement measured from the mean position to an extreme, commonly used in the context of waves to denote the height of a wave peak.

Wavelength

The distance between consecutive crests of a wave, especially points in a sound wave or electromagnetic wave, which determines its characteristics like color or pitch.