According to the Assumptions of the Quantity Theory of Money,if

question 91

Multiple Choice

According to the assumptions of the quantity theory of money,if the money supply increases by 5 percent,then

• A)nominal and real GDP would rise by 5 percent.
• B)nominal GDP would rise by 5 percent;real GDP would be unchanged.
• C)nominal GDP would be unchanged;real GDP would rise by 5 percent.
• D)neither nominal GDP nor real GDP would change.

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Definitions:

Property Value

Typically refers to the monetary worth of a real estate property, established for the purpose of taxation or sales.

Compounded 12 Times Per Year

Refers to the process of applying interest to an original amount of money, with the interest being calculated and added twelve times in a year.

Compounded 365 Times Per Year

A term used in finance to indicate that interest is calculated and added to an account's balance 365 times in one year, or daily.

Composition

The process or result of combining two or more functions by applying one function to the result of the other.