The Quantity Theory of Money States That

question 14

Multiple Choice

The quantity theory of money states that

• A)MV = PY
• B)since velocity is reasonably stable,we can predict the effects of an increase in the money supply on nominal income
• C)since velocity is not stable,changes in the money supply have unpredictable impacts on income
• D)since velocity is reasonably stable,we can predict the effects of an increase in the money supply on employment
• E)since velocity is reasonably stable,we can predict the effects of an increase in the money supply on interest rates

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Definitions:

Four Factors

Often refers to fundamental factors used in various contexts, specifics depend on the field of application.

Internal Growth Rate

The highest rate at which a firm can grow its sales, revenues, and earnings using only internal financing.

Finance Perspective

The viewpoint or approach focusing on financial management, investments, and the economic aspects of business operations.

Dividend Payout Ratio

The percentage of earnings a company distributes to its shareholders in the form of dividends, serving as a measure of how much profit is returned to shareholders versus retained for growth.