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Suppose the Money Supply Increases by 10 Percent but Velocity

Question 81

Multiple Choice

Suppose the money supply increases by 10 percent but velocity is not constant. Given this information, it follows that:


A) nominal GDP will increase by 10 percent.
B) nominal GDP will increase by less than 10 percent.
C) nominal GDP will increase by more than 10 percent.
D) the change in nominal GDP cannot be determined.

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