The Quantity Theory of Money Multiple Choice Questions
Description
I’ll put the rest of the questions here
19) the quantity theory of money predicts that, in the long run, inflations results from the:
a) velocity of money growing at a faster rate than real GDP
b) velocity of money growing at a lower rate than real GDP
c) money supply growing at a lower rate than real GDP
d) money supply growing at a faster rate than real GDP
20) according to the quantity theory of money, if the money supply grows at 20n percent and real GDP grows at 5 percent, then the inflation rate will be:
a) 15%
b) 20%
c) 25%
d) 100%
21) using the quantity equation, if the velocity of money grows at 5 percent, the money supply grows at 10 percent, and real GDP grows at 4 percent, then the inflation rate will be:
a) 19%
b) 15%
c) 11%
d) 6%
22) the quantity theory of money implies that the price level will be stable (no inflation or deflation) when the growth rate of the money supply equals:
a) 0
b) the growth rate of the price level
c) the growth rate of the velocity of money
d) the growth rate of real GDP