If the Money Supply Rises from $600 Billion to $800

question 91

Multiple Choice

If the money supply rises from $600 billion to $800 billion and nominal GDP stays unchanged at $4,800 billion, then the income velocity of money:

• A) Rises by 33 percent
• B) Falls by 33 percent
• C) Rises from 6 to 8
• D) Falls from 8 to 6

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Definitions:

Exchange Theory

A theoretical framework that analyzes social interactions in terms of the benefits and costs between the parties involved.

Matching Hypothesis

The theory suggesting that people are more likely to form and succeed in a committed relationship with someone who is equally attractive as they are.

Swipe Sites

Online platforms, often used for dating, where users make quick decisions on potential matches by swiping images left or right.

Relationship Churning

The pattern of repeated breakups and reconciliations in a romantic relationship, often leading to instability and uncertainty.