Which of the Following Is True

Multiple Choice

Which of the following is true?
I. The quantity theory predicts that in the long run the inflation rate equals the money growth rate minus the growth rate of potential GDP.
II. If the Fed decreases the federal funds rate,aggregate demand increases.
III. The Fed's monetary policy works by shifting the short-run aggregate supply curve.

A) I and II
B) II and III
C) I and III
D) I, II and III