According to the quantity theory of money, an increase in the money supply causes an increase in _____ over the long run.
A) production
B) the velocity of money
C) real GDP
D) prices

Question

Quizplus · Accepted Answer

According to the quantity theory of money, an increase in the money supply causes an increase in prices over the long run, as the increase in the supply of money creates inflationary pressures. It does not directly impact production, velocity of money or real GDP.

According to the Quantity Theory of Money, an Increase in the Money