Factors That Could Weaken the Relationship Between Money Growth Rates

Multiple Choice

Factors that could weaken the relationship between money growth rates and changes in price levels and rates of exchange include:

A) national differences in variables affecting growth of real income or the demand for money.
B) differences in transportation costs, making trade nearly impossible.
C) differences in the willingness of government to address economic problems with fiscal versus monetary policy.
D) national differences in variables, differences in transportation costs, and differences in the willingness of government to address economic problems with fiscal policy.