Which of the Following Statements About the Classical Money Transmission

question 209

Multiple Choice

Which of the following statements about the classical money transmission mechanism is FALSE?

• A) The quantity theory provides a good explanation of the short-run impact of monetary growth.
• B) The quantity theory provides a good explanation of the long-run impact of monetary growth.
• C) Changes in the money supply typically affect prices before equilibrium can be reestablished.
• D) People typically respond to money supply changes by making more or fewer purchases of goods and services.

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