Author Question: The equation of exchange states that: a. money supply multiplied by real output equals velocity. ... (Read 123 times)

javeds · **on:** Jun 30, 2018

The equation of exchange states that:
a. money supply multiplied by real output equals velocity.
b. velocity multiplied by money supply equals the selling price times the quantity of actual output.
c. money supply divided by velocity equals nominal GDP.
d. money supply divided by velocity equals real GDP.

Question 2

As the marginal propensity to consume (MPC) increases, the spending multiplier:
a. increases.
b. decreases.
c. remains constant.
d. becomes undefinable.