QUESTION 26 (Quantity of Money in circulation) x (Velocity of money) (Price) x (Real output) Velocity is equal to 2 and is constant Output is equal to 1000 and the economy is at full employment Price is equal to 100 26. Given the above, how will price level change if the quantity of money in circulation is increased from 50,000 to 100,000? O a) Price Level will decrease from 100 to 50 O b) Price Level will increase from 100 to 500 O c) Price Level will increase from 100 to 200 O d) Price Level will remain unchanged Oe) None of the above. MV = PQ V = 2 Q = 1000 P = 100

QUESTION 26 (Quantity of Money in circulation) x (Velocity of money) (Price) x (Real output) Velocity is equal to 2 and is constant Output is equal to 1000 and the economy is at full employment Price is equal to 100 26. Given the above, how will price level change if the quantity of money in circulation is increased from 50,000 to 100,000? O a) Price Level will decrease from 100 to 50 O b) Price Level will increase from 100 to 500 O c) Price Level will increase from 100 to 200 O d) Price Level will remain unchanged Oe) None of the above. MV = PQ V = 2 Q = 1000 P = 100

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Money Growth And Inflation

Section: Chapter Questions

Problem 1PA

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