According to the Quantity Theory of Money, If Output Is

question 59

Multiple Choice

According to the quantity theory of money, if output is higher, ______ real balances are required, and for fixed M this means ______ P.

• A) higher; lower
• B) lower; higher
• C) higher; higher
• D) lower; lower

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Definitions:

Substitute Resources

Alternative resources that can be used in place of another for the production of goods and services.

Resource

A source or supply from which benefit is produced, typically natural, human, or capital resources used to produce goods and services.

Minimum Wage

The lowest legally allowable pay per hour for workers, set by government policy.

Market Equilibrium

A market state where the supply of goods matches demand, leading to stable prices.