Suppose That Velocity and Output Are Constant and That the Quantity

question 169

Multiple Choice

Suppose that velocity and output are constant and that the quantity theory and Fisher effect are both correct. If the nominal interest rate is 4 percent and inflation is 2 percent, what is the money supply growth rate or the real interest rate?

• A) The money supply growth rate is 2 percent.
• B) The real interest rate is 6 percent.
• C) The real interest rate is 4 percent.
• D) The money supply growth rate is 6 percent.

---

Definitions:

Copyright Office

A governmental body responsible for registering copyrights, providing legal protection for original works of authorship.

Employment Contract

A legal agreement between an employer and employee that outlines the terms and conditions of employment.

Copyright Law

The branch of intellectual property law that safeguards creators by preventing the unauthorized replication of their work.

Canadian Author

A writer from Canada who creates various forms of literature, including novels, poetry, essays, and more, contributing to Canadian culture and identity.