The Quantity Theory of Money Along with the Assumption of a Constant

question 5

Multiple Choice

The quantity theory of money along with the assumption of a constant velocity can explain which of the following?

• A) At a given level of money growth, the higher the level of real growth the higher the level of inflation will be.
• B) At a given level of money growth, the higher the level of real growth the lower the level of inflation will be.
• C) If real growth is higher than money growth, the price level must be rising.
• D) If real growth equals money growth, the price level is falling.

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