In the Long Run, According to the Quantity Theory of Money

question 53

Multiple Choice

In the long run, according to the quantity theory of money and the classical macroeconomic theory, if velocity is constant, then ______ determines real GDP and ______ determines nominal GDP.

• A) the productive capability of the economy; the money supply
• B) the money supply; the productive capability of the economy
• C) velocity; the money supply
• D) the money supply; velocity

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Definitions:

Hippocampus

A region in the brain crucial for learning and memory formation.

Sympathetic Nervous System

A branch of the autonomic nervous system responsible for mobilizing the body's responses under stress, famously known for its role in the "fight or flight" response.

Prefrontal Cortex

The front part of the frontal lobe of the brain, involved in complex cognitive behavior, personality expression, decision making, and moderating social behavior.

Parasympathetic Nervous System

Part of the autonomic nervous system responsible for conserving energy, slowing the heart rate, and facilitating digestion and relaxation.