If initially the money supply is SI trillion, velocity is 5, the price level is 1, and
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Question:
If initially the money supply is SI trillion, velocity is 5, the price level is 1, and real GDP is S5 trillion, an increase in the money supply to S2 trillion
A) increases real GDP to S10 trillion.
B) causes velocity to fall to 2.5.
C) increases the price level to 2.
D) increases the price level to 2 and velocity to 10.
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