When real GDP equals potential GDP, the quantity theory of money ...

[kellyjaisingh]

When real GDP equals potential GDP, the quantity theory of money says that an increase in the quantity of money brings an equal percentage
 
  A) decrease in real GDP.
  B) decrease in velocity.
  C) decrease in the price level.
  D) increase in the price level.
  E) increase in real GDP.

Question 2

Which of the following is correct?
  i. A surplus puts downward pressure on the price of a good.
  ii. A shortage puts upward pressure on the price of a good.
  iii. There is no surplus or shortage at equilibrium.
 
  A) i and ii B) only iii C) ii and iii D) i and iii E) i, ii, and iii

[Hdosisshsbshs]

Answer to Question 1

D

Answer to Question 2

E