Multiple Choice
Since classical economists believe that both V and Q are constants for an economy in short-run equilibrium, the equation of exchange becomes a theory in which:
A) the quantity of money explains prices.
B) the quantity of money explains velocity.
C) the quantity of money explains real GDP.
D) changes in M cause changes in V.
E) prices are never flexible
Correct Answer:
Verified
Correct Answer:
Verified
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