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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