The quantity theory asserts that real GDP is
A) equal to nominal GDP multiplied by the quantity of money.
B) never different from potential GDP.
C) equal to nominal GDP divided by the quantity of money.
D) not influenced by the quantity of money.

Question

Quizplus · Accepted Answer

The quantity theory of money suggests that real GDP is not influenced by the quantity of money; instead, it focuses on the relationship between money supply and price levels, assuming real GDP is determined by factors like technology and resources.

The Quantity Theory Asserts That Real GDP Is