Skip to content
MathsGenie logo
Open app

Course home

  1. A Level
  2. Economics OCR
  3. Question bank

The financial sector

EasyMediumHard
12345678910111213141516171819202122232425
Question 23

According to the Fisher equation of exchange (MV=PQMV = PQMV=PQ), which represents the Quantity Theory of Money, suppose that a central bank increases the money supply (MMM) by 15.5%. Over the same period, due to supply-side improvements, the real value of national output (QQQ) increases by 5.0%. Assuming that the velocity of circulation (VVV) remains constant, what is the resulting percentage change in the general price level (PPP)?

An increase of 10.5%10.5\%10.5%

A decrease of 9.1%9.1\%9.1%

An increase of 10.0%10.0\%10.0%

An increase of 21.3%21.3\%21.3%

The financial sector Questions

  1. A Level
  2. /Economics
  3. /The financial sector