Monetarists say
A)that, because P is stable, a change in M will change Q proportionately in the opposite direction.
B)a change in the money supply will change aggregate demand and therefore the nominal GDP.
C)a change in the money supply will change velocity, which in turn will change nominal GDP.
D)a change in the money supply will change the interest rate, which will change investment spending and nominal GDP.

Question

Quizplus · Accepted Answer

Monetarists believe that changes in the money supply directly affect aggregate demand and nominal GDP, assuming velocity and prices are relatively stable in the short run.

Monetarists Say