In the simple quantity theory of money, the supply of money is:
A) exogenous.
B) a random variable.
C) determined by the relationship between output and the price level.
D) endogenous.
E) equal to the supply of gold reserves.

Question

Quizplus · Accepted Answer

In the simple quantity theory of money, the supply of money is considered exogenous, as it is determined by the central bank's monetary policy decisions and not directly influenced by output or price levels.

In the Simple Quantity Theory of Money, the Supply of Money