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

question 64

Multiple Choice

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

• A)both the price level and nominal GDP would rise by 5 percent.
• B)the price level would rise by 5 percent and nominal GDP would be unchanged.
• C)the price level would be unchanged and nominal GDP would rise by 5 percent.
• D)both the price level and nominal GDP would be unchanged.

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Definitions:

Depreciation Expense

Dividing the expenditure associated with a tangible asset over its operational life.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its decrease in value due to use, wear and tear, or obsolescence.

Depletion

The allocation of the cost of natural resources over their productive life, commonly used in industries like mining and forestry.

Amortization

The gradual reduction of a debt or the spreading of an intangible asset's cost over its useful life.