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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Definitions:

Digestive Tract

The series of hollow organs joined in a long, twisting tube from the mouth to the anus through which food is digested and nutrients are absorbed.

Digestion

The process by which food is broken down into smaller components, eventually to be absorbed into the bloodstream for use by the body.

Elimination

The process of removing waste products and toxins from the body, achieved through mechanisms such as excretion and defecation.

Ingestion

The act of consuming food, beverages, or any other material by ingestions or absorption into the organism.