Which of the Following Is Not Implied by the Quantity

question 240

Multiple Choice

Which of the following is not implied by the quantity equation?

• A)If velocity is stable and money is neutral,an increase in the money supply creates a proportional increase in nominal output.
• B)If velocity is stable and money is neutral,an increase in the money supply creates a proportional increase in the price level.
• C)With constant money supply and output,an increase in velocity creates an increase in the price level.
• D)With constant money supply and velocity,an increase in output creates a proportional increase in the price level.

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Definitions:

Market Behavior

Refers to the aggregate actions and reactions of buyers and sellers in a marketplace, influencing prices, supply, and demand.

Trade

The exchange of goods, services, or both between two or more parties, often internationally or domestically to mutual advantage.

Short-run

A time period in economics during which at least one input, such as factory size or capital, is fixed, and firms can adjust production levels only by changing variable inputs like labor.

Inflation

The growth rate of general prices for goods and services, which sequentially leads to a reduction in the ability to make purchases.