The Simple Quantity Theory of Money Predicts That If

question 12

Multiple Choice

The simple quantity theory of money predicts that if

• A) the money supply rises by $200,then GDP falls by $200.
• B) GDP rises by $400,then the money supply rises by $400.
• C) the money supply rises by 10 percent,then the price level rises by 10 percent.
• D) the money supply falls by $300,then GDP rises by $300.

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Definitions:

Charitable Tax Relief

Financial deductions available to taxpayers who make contributions to legally recognized nonprofit organizations.

Valid and Enforceable

Pertaining to a contract or agreement that is legally binding and can be upheld in a court of law.

Statute of Frauds

A legal requirement that certain types of contracts be memorialized in a signed writing with sufficient content to evidence the contract.

Contract of Guarantee

A contract where a third party agrees to be responsible for the debt or obligations of a borrower in case the borrower fails to fulfill their contractual obligations.