The Quantity Theory of Money Predicts That When the Economy

question 62

Multiple Choice

The quantity theory of money predicts that when the economy is at potential GDP, a 10 percent increase in the money supply results in a 10 percent

• A) increase in the inflation rate.
• B) decrease in unemployment.
• C) decrease in the inflation rate.
• D) increase in the velocity of money.
• E) increase in potential GDP.

---

Definitions:

Employment Laws

Regulations that govern the relationship between employers and employees, outlining the legal rights and obligations of both parties in the workplace.

Social Media

Platforms and websites that enable users to create and share content or to participate in social networking.

Objectively Verifiable

Information or data that can be confirmed by an independent observer or through empirical evidence, free from personal biases.

Consistently

In a uniform manner; regularly or without significant variation.