Question 13According to the assumptions of the quantity theory of money, if the money supply increases by 7percent, thenneither nominal GDP nor real GDP would change.nominal GDP would fall by 7 percent; real GDP would be unchanged.nominal and real GDP would increase by 7 percent.O real GDP would be unchanged; nominal GDP would increase by 7 percent.

ANSWER STEP-1 Ans:- option (D) real GDP would be unchanged, nominal GDP would increase by 7 percent…

According to the assumptions of the quantity theory of money, if the money supply increases by 7 percent, then neither nominal GDP nor real GDP would change. O nominal GDP would fall by 7 percent; real GDP would be unchanged. O nominal and real GDP would increase by 7 percent. O real GDP would be unchanged; nominal GDP would increase by 7 percent.

According to the assumptions of the quantity theory of money, if the money supply increases by 7 percent, then neither nominal GDP nor real GDP would change. O nominal GDP would fall by 7 percent; real GDP would be unchanged. O nominal and real GDP would increase by 7 percent. O real GDP would be unchanged; nominal GDP would increase by 7 percent.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: Money Growth And Intlation

Section: Chapter Questions

Problem 1QR

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