According to the Quantity Theory of Money, the Price Level

question 5

Multiple Choice

According to the quantity theory of money, the price level is:

• A) exogenous.
• B) determined by the money supply only.
• C) determined by the ratio of the effective quantity of money to the volume of goods.
• D) indeterminate in the long run.
• E) determined by the volume of goods produced.

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Definitions:

Commercially Impracticable

A doctrine where parties are relieved from their contractual duties when events have occurred making performance excessively difficult or costly.

Unforeseen Shortage

A sudden and unexpected lack of necessary supplies or resources.

Recycled Metals

Metals that have been processed and reformed from previously used materials to reduce waste and environmental impact.

All-Weather

Designed to operate or remain usable in all types of weather conditions.