According to the quantity theory of money, (a)    Increases in the money supply will lead to inflation, ceteris paribus (b)   The level of inflation is independent of the money supply (c)    The money supply times the velocity equals the real GDP (d)   When real GDP rises, the money supply must fall by the same proportion (e)    The velocity of money is assumed to fluctuate widely over time

MACROECONOMICS FOR TODAY
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Chapter16: Monetary Policy
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Problem 15SQ
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  1. According to the quantity theory of money,

(a)    Increases in the money supply will lead to inflation, ceteris paribus

(b)   The level of inflation is independent of the money supply

(c)    The money supply times the velocity equals the real GDP

(d)   When real GDP rises, the money supply must fall by the same proportion

(e)    The velocity of money is assumed to fluctuate widely over time

 

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