APFIVE Quantity Theory of Money and Price Level
If the money supply increases by 8% and real GDP grows by 3%, what will happen to the price level according to the quantity theory of money, assuming velocity remains constant?
A
The price level will increase by 3%
B
The price level will increase by 8%
C
The price level will decrease by 5%
D
The price level will increase by 5%
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