In the long run, money market equilibrium determines the real interest rate pric

Question

In the long run, money market equilibrium determines the real interest rate price level nominal interest rate economic growth rate If the quantity theory of money is correct and other things remain an increase in the quantity of money increases nominal GDP and the velocity of circulation the price level and potential GDP real GDP nominal GDP and the price level . In the long run with a constant velocity of circulation, the inflation rate is constant and equals the money growth rate equals the money growth rate minus the growth rate of real GDP equals the growth rate of real GDP minus the growth rate of money is positive if the economic growth rate is positive The costs of inflation do include the cost of running around to compare prices at different outlets the increased opportunity cost of holding money the tax on money held by individuals and businesses an increase in saving and investment

Explanation / Answer

answer 5 B. PRICE LEVEL

answer 6 D. nominal GDP and PRICE LEVEL

answer 7 B. equals the money growth rate minus the growth rate of Real GDP

answer 8 D.an increase in saving and investment

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