Macroeconomics

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Moderate

Increasing Real Output

MACRO-XG2W3Y

According to the quantity theory of money, which of the following is true when the economy's real output is increasing, and the price level and the velocity of money are each constant?

A

The growth rate of real GDP is equal to the growth rate of the money supply.

B

The money supply must be decreasing.

C

Nominal GDP must be constant.

D

The natural rate of unemployment must be decreasing.