Causality Is Clear and Mechanical with the Quantity Theory of Money

question 42

Multiple Choice

Causality is clear and mechanical with the quantity theory of money. If M increases because V and Q are:

• A) variable, the price level, P, increases.
• B) variable, the price level, P, decreases.
• C) constant, the price level, P, increases.
• D) constant, the price level, P, decreases.

---

Definitions:

Imports

Goods or services brought into one country from another for the purpose of trade or sale.

Cournot Duopolists

A market structure in which two companies assume the other's output to be constant when determining their optimal production levels.

Total Costs

The total of all expenses involved in creating goods or services, encompassing both constant and fluctuating costs.

Daily Profit

The net financial gain or loss a business experiences on a daily basis.