Multiple Choice
If long-run real GDP growth is determined by real changes in the economy, the quantity theory of money implies that changes in:
A) the money growth rate lead one-for-one to changes in the inflation rate in the long run.
B) the money growth rate lead one-for-one to changes in the inflation rate, but only in the short run.
C) velocity lead one-for-one to changes in the inflation rate.
D) the money growth rate lead to a greater than one-for-one change in the inflation rate in the long run.
E) None of these answers is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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