Multiple Choice
According to the growth version of the quantity equation, a 4% increase in the money supply (holding velocity constant) causes a 2% increase in prices only if:
A) nominal GDP increases by 2 percent.
B) real GDP increases by 2 percent.
C) real GDP decreases by 2 percent.
D) nominal GDP decreases by 2 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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