Suppose Velocity Is Constant at 4,real Output Is 10,and the Price

question 42

Multiple Choice

Suppose velocity is constant at 4,real output is 10,and the price level is 2.From this initial situation,the government increases the nominal money supply to 6.If velocity and output remain unchanged,by how much will the price level increase?

• A)2)4%
• B)20%
• C)24%
• D)50%