What basic assumption about the velocity of money transforms the equation of exchange into the quantity theory
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What basic assumption about the velocity of money transforms the equation of exchange into the quantity theory of money? Also:
- According to the quantity theory, what will happen to nominal GDP if the money supply increases by 5 percent and velocity does not change?
- What will happen to nominal GDP if, instead, the money supply decreases by 8 percent and velocity does not change?
- What will happen to nominal GDP if, instead, the money supply increases by 5 percent and velocity decreases by 5 percent?
- What happens to the price level in the short run in each of these three situations?
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Related Book For
Economics A Contemporary Introduction
ISBN: 9781305505469
11th Edition
Authors: William A. McEachern
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