From the equation of exchange, if both real income (Y) and the quantity of money (M) double and the price level (P) remainsconstant, then velocity (V).and nominal incomedoubles; remains constantdecreases by 50 percent; quadruplesremains constant; doublesdoubles; doublesnone of the above

The quantity theory of money:- According to the American Economist Irving Fisher, there is a…

From the equation of exchange, if both real income (Y) and the quantity of money (M) double and the price level (P) remains constant, then velocity (V) and nominal income O doubles; remains constant decreases by 50 percent; quadruples O remains constant; doubles O doubles; doubles none of the above

From the equation of exchange, if both real income (Y) and the quantity of money (M) double and the price level (P) remains constant, then velocity (V) and nominal income O doubles; remains constant decreases by 50 percent; quadruples O remains constant; doubles O doubles; doubles none of the above

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter12: Fiscal Policy, Incentives, And Secondary Effects

Section: Chapter Questions

Problem 3CQ

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Question

From the equation of exchange, if both real income (Y) and the quantity of money (M) double and the price level (P) remains
constant, then velocity (V).
and nominal income
doubles; remains constant
decreases by 50 percent; quadruples
remains constant; doubles
doubles; doubles
none of the above

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