According to the Assumptions of the Quantity Theory of Money

Multiple Choice

According to the assumptions of the quantity theory of money, if the money supply increases by 4 percent, then

A) nominal and real GDP would rise by 0.40 percent.
B) nominal GDP would rise by 4 percent; real GDP would be unchanged.
C) nominal GDP would be unchanged; real GDP would rise by 4 percent.
D) neither nominal GDP nor real GDP would change.