If the velocity of money is assumed to be constant in the short run, the quantity theory of money contends that a decrease in the money supply will lead to a proportional a.Increase in unemployment rate b.Increase in nominal interest rate c.increase in price level d.Decrease in nominal output

If the velocity of money is assumed to be constant in the short run, the quantity theory of money contends that a decrease in the money supply will lead to a proportional a.Increase in unemployment rate b.Increase in nominal interest rate c.increase in price level d.Decrease in nominal output

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter27: Issues In Macroeconomic Theory And Policy

Section: Chapter Questions

Problem 5P

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Question

If the velocity of money is assumed to be constant in the short run, the quantity theory of money contends that a decrease in the money supply will lead to a proportional

a.Increase in unemployment rate

b.Increase in nominal interest rate

c.increase in price level

d.Decrease in nominal output

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