The velocity of circulation of money is constant

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Suppose that the velocity of circulation of money is constant and equal to 5. If the Fed increases the supply of money by 5%, which of the following statements can we claim to be true with certainty?

A. P will increase by 5%, Y will remain the same.

B. Y will increase by 5%, P will remain the same.

C. The nominal GDP will increase by 5%.

D. None o the above.

Reference no: EM131379950

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