Suppose Monetary Neutrality Holds and Velocity Is Constant

question 137

Multiple Choice

Suppose monetary neutrality holds and velocity is constant.A 4 percent increase in the money supply

• A)increases the price level by more than 4 percent.
• B)increases the price level by 4 percent.
• C)increases the price level by less than 4 percent.
• D)increases real GDP by 4 percent.

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