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    Macroeconomics Study Set 40
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    Exam 8: Money, the Price Level, and Inflation
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    According to the Quantity Theory of Money, a 25 Percent
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According to the Quantity Theory of Money, a 25 Percent

Question 395

Question 395

Multiple Choice

According to the quantity theory of money, a 25 percent change in M, the quantity of money, leads to a 25 percent change in


A) V, the velocity of circulation.
B) Y, real GDP.
C) P, the price level.
D) R, the interest rate.

Correct Answer:

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