If the Growth Rate of Money Is 3% and the Growth

question 55

Multiple Choice

If the growth rate of money is 3% and the growth rate of velocity is 1%,the growth rate of nominal GDP is:

• A) 0%.
• B) 1%.
• C) 2%.
• D) 4%.

---

Definitions:

Compounded Annually

A method of calculating interest where the interest rate is applied once per year to the principal, including any interest from previous periods.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money that they borrow from a lender.

Compounded Monthly

A method of calculating interest where the interest earned is added to the principal, and the total becomes the basis for calculation in the subsequent month.

Insurance Settlement

The amount paid by an insurance company to a policyholder or claimant as compensation for a covered loss.