Suppose the economy is in long-run equilibrium. Using the monetarist model, what happens to the price level and real GDP in the long run as a result of an increase in velocity?

a.The price level falls and there is no change in real GDP.

b.The price level increases and there are no changes in real GDP.

c.The price level remains constant and real GDP increases.

d.The price level falls and real GDP increases.

e.none of the above

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In the monetarist model an increase in velocity is typically associated with an increas... View the full answer