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Sav [38]
3 years ago
13

According to the quantity theory of money, the quantity of money is related negatively to the nominal interest rate:

Business
1 answer:
galben [10]3 years ago
3 0

Answer:

d. positively to the nominal gross domestic product

Explanation:

The quantity theory of money :

M = (P x Y ) / V

Where m = quantity of money

P × Y = nominal GDP

V = velocity

Velocity is assumed to be constant in the short run. It is also believed that Y is constant in the short run. Therefore, movement in price level is determined by the quantity of money.

I hope my answer helps you.

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