Consider the equation %ΔM + %ΔV ≈ %ΔP + %ΔY. If the velocity of money does not change (%ΔV = 0), and the change in real GDP exactly keeps pace with the change in the money supply (%ΔM = %ΔY), what will happen to the price level (P)?

It will stay the same i.e %ΔP = 0

Explanation:

We are given the following formula,

%ΔM + %ΔV ≈ %ΔP + %ΔY

And told that,

%ΔV = 0

%ΔM = %ΔY

If that is the case therefore then the new formula should be written as follows,

%ΔM = %ΔY

This is because the % change in money supply is the only variable that is on the left side of the equation. For it to be equal to % change in real GDP on the right side of the equation then ONLY the % change in real GDP can exist on the right side. Which means that %ΔP has to be 0 as well.

For example, assume both %ΔM and %ΔY are 2 and %ΔP is 1

%ΔM = %ΔY

2 ≠ 2 + 1

The equation is not satisfied.

Now assume %ΔP = 0.

2 = 2 + 0.

Equation is satisfied.

Seeing as %ΔP is 0 that means there is no change in Prices so the Price Level stays the same.

oh my god you are going so many marks marks i don't want to give you answers sorry

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

hope this