Assuming That Velocity Is Stable, If Real GDP Grows by 10

question 8

Multiple Choice

Assuming that velocity is stable, if real GDP grows by 10 percent this year, and if the money supply does not change this year, how does the price level and nominal GDP change?

• A) The price level and nominal GDP will not change.
• B) The price level will not change but nominal GDP will grow by 10 percent.
• C) The price level will decrease by 10 percent and nominal GDP will stay the same.
• D) The price level and nominal GDP will increase by 10 percent.

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