Which of the Following Statements Is FALSE

Multiple Choice

Which of the following statements is FALSE?

A) the relationship between money growth and inflation is much looser for M1 than M2
B) in the short run, the velocity of M2 is affected by variations in output and interest rates
C) there is no economic rule that says that velocity must be constant in the long run
D) in the long run, the inflation rate is always exactly equal to the growth rate of money supply
E) higher monetary growth lowers real interest rates in the short run, but raises nominal interest rates in the long run