Quantity theory of money


Suppose that the quantity theory of money holds for this economy. Which of the following statements, if any, is true

A. Potential GDP depends on the quantity of money.

B. None of these statements is true.

C. The velocity of circulation is 10.

D. In the long run, the fundamental source of inflation is the growth of potential GDP.

E. Nominal GDP is 600,000.

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Macroeconomics: Quantity theory of money
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