Quantity Theory of Money and Price Level
According to the quantity theory of money, if the money supply increases by 8%, real GDP grows by 3%, and the velocity of money is constant, what will be the resulting change in the price level?
A
The price level will increase by 8%
B
The price level will increase by 5%
C
The price level will decrease by 5%
D
The price level will increase by 3%
Question Leaderboard
Not enough data yet to show leaderboard.