What two components of the quantity theory of money are assumed to be stable?
A) the velocity of money and the price level
B) real GDP and price level
C) real GDP and the velocity of money
D) the money supply and the velocity of money

Question

Quizplus · Accepted Answer

The quantity theory of money assumes that the velocity of money and real GDP are stable, allowing changes in the money supply to directly affect the price level.

What Two Components of the Quantity Theory of Money Are