Starting from Long-Run Equilibrium, If the Velocity of Money Increases

question 82

Multiple Choice

Starting from long-run equilibrium, if the velocity of money increases (due to, for example, the invention of automatic teller machines) and no action is taken by the government:

• A) prices will rise in both the short run and the long run.
• B) output will rise in both the short run and the long run.
• C) prices will rise in the short run and output will rise in the long run.
• D) output will rise in the short run and prices will rise in the long run.

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