If Y and M Are Constant and V Doubles,the Quantity

question 17

Multiple Choice

If Y and M are constant and V doubles,the quantity equation implies that the price level

• A)falls to half its original level.
• B)doubles.
• C)more than doubles.
• D)does not change.

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Definitions:

Gold Standard

A financial system in which the value of a nation's currency or banknotes is directly tied to gold.

Money Supply

The money supply represents the entire sum of financial assets within an economy at a given moment, encompassing cash, coins, and the amounts present in checking and savings accounts.

Managed Float System

An exchange rate system that combines features of freely floating rates with sporadic intervention by central banks.

Bretton Woods Agreement

A 1944 agreement that established fixed foreign exchange rates for major currencies, as well as the IMF and the World Bank.