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3a. If the money supply is $20,000, velocity is 3, and Real GDP is 5,000 units...

3a. If the money supply is $20,000, velocity is 3, and Real GDP is 5,000 units of output, then the price level is _____________. If the money supply doubled over a short time period to $40,000, the simple quantity theory of money would predict that _____________________.

A. $12; the price level would double

B. $6; the price level would double

C. $6; Real GDP would double

D. $12; the price level would be cut in half

3b.If the money supply is $6,000, velocity is 5, and Real GDP is 10,000 units of output, then the price level is _____________. If the money supply doubled over a short time period to $12,000, the simple quantity theory of money would predict that _____________________.

A. $3; the price level would be cut in half

B. $3; the price level would double

C. $3; Real GDP would double

D. $2; the price level would double

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