According to the quantity theory of money, what happens if the money supply increases by 10% if the current rate of unemployment is equal to the natural rate of unemployment?
Choose 1 answer:
A. The price level increases by 10%
B. Real output increases 10%
C. Real output increases more than the increase in the price level
D. Real output and the velocity of money both increase
E. The price level increases by 5% and real output increases by 5%