Which of the Following Is Not Implied by the Quantity

question 240

Multiple Choice

Which of the following is not implied by the quantity equation?

• A)If velocity is stable and money is neutral,an increase in the money supply creates a proportional increase in nominal output.
• B)If velocity is stable and money is neutral,an increase in the money supply creates a proportional increase in the price level.
• C)With constant money supply and output,an increase in velocity creates an increase in the price level.
• D)With constant money supply and velocity,an increase in output creates a proportional increase in the price level.

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Definitions:

Spillover Effects

Spillover Effects are unintended consequences of an economic activity that affect third parties who are not directly involved in the activity itself.

Nonconsenting Third Parties

Nonconsenting third parties are individuals or groups that are affected by the actions of others without having agreed to or participated in the decision-making process.

Externalities

Costs or benefits that affect a party who did not choose to incur those costs or benefits, often leading to market failure if not addressed.

Allocation of Resources

The process of distributing available resources among various uses or projects in order to achieve desired outcomes or maximize efficiency.