According to the quantity theory of money, in the long run, changes in the money supply affect ____ GDP but not _____ GDP.
A) nominal; per capita
B) per capita; nominal
C) real; nominal
D) nominal; real

Question

Quizplus · Accepted Answer

The quantity theory of money suggests that changes in the money supply have a direct effect on nominal GDP (which includes changes in prices) in the long run, but not on real GDP, which is adjusted for inflation and reflects the actual volume of goods and services produced.

According to the Quantity Theory of Money, in the Long