Based on the quantity theory of money, which of the following statements about the potential effects of rapid increase in money supply M2 in early 2020 is (are) true? a. If total expenditure did not change, the velocity of circulation had to go down. o. If the velocity of circulation was constant, then either prices or output or both had to go up. c. If output and the velocity of money went down, the effect on prices is unclear. d. All of the above.

Based on the quantity theory of money, which of the following statements about the potential effects of rapid increase in money supply M2 in early 2020 is (are) true? a. If total expenditure did not change, the velocity of circulation had to go down. o. If the velocity of circulation was constant, then either prices or output or both had to go up. c. If output and the velocity of money went down, the effect on prices is unclear. d. All of the above.

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Influence Of Monetary And Fiscal Policy On Aggregate Demand

Section: Chapter Questions

Problem 5CQQ

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