According to the quantity equation, if Y and M are constant and V doubles, what factor...

Question

Question

According to the quantity equation, if Y and M are constant and V doubles, what factor does the price level multiply 11 000,

Answer 1

Answer #1

Equation of exchange states P * Y = M * V

P: price level

M: money supply

V: velocity of money

Y: Real GDP

If Y & M are constant, and V doubles, then P should double (multiply by 2) to satisfy the equation

First option is correct answer

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Answer 2

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