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Macroeconomics

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Quantity Theory of Money: Relationship between Money and Prices

MACRO-QDBS61

Suppose that the velocity of money and real GDP are constant. If the money supply were to increase by $15$ percent, the Quantity Equation would predict a

A

$15$ percent increase in unemployment.

B

$30$ percent increase in prices.

C

$15$ percent increase in prices.

D

$30$ percent increase in unemployment.