4. The quantity theory of money: What is the key endogenous variable in the quantity theory? Explain the effect on this key variable of the following changes: 1. The money supply is doubled. 2. The velocity of money increases by 10%. 3. Real GDP rises by 2%. 4. The monev supply increases by 3% while real GDP rises by 3%% at the same time.
4. The quantity theory of money: What is the key endogenous variable in the quantity theory? Explain the effect on this key variable of the following changes: 1. The money supply is doubled. 2. The velocity of money increases by 10%. 3. Real GDP rises by 2%. 4. The monev supply increases by 3% while real GDP rises by 3%% at the same time.
Chapter1: Making Economics Decisions
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Transcribed Image Text:4. The quantity theory of money: What is the key endogenous variable in the quantity theory? Explain the effect on this key variable of the following changes:
1. The money supply is doubled.
2. The velocity of money increases by 10%.
3. Real GDP rises by 2%.
4. The money supply increases by 3% while real GDP rises by 3% at the same time.
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