If the Fed Adheres to a Strict "Money Growth Rule $\vec { M }$

question 144

Multiple Choice

If the Fed adheres to a strict "money growth rule" of 3% (that is, they keep $\vec { M }$ at 3% no matter what) , what happens if velocity growth ( $\vec { v }$
) drops?

• A) Inflation, real growth, and nominal wage growth all decrease.
• B) Inflation increases, but real growth and nominal wage growth decrease.
• C) Inflation and nominal wage growth decrease, but real growth increases.
• D) Inflation, real growth, and nominal wage growth all increase.

---

Definitions:

Strategy

Positions the organization in the competitive environment and implements actions to compete successfully.

Kills An Idea

The act of dismissing or negating a concept or suggestion, preventing its development or implementation.

Credentials

Formal qualifications or certifications that signify a person's expertise or competence in a specific field.

Wisdom

The quality of having experience, knowledge, and good judgment; the ability to apply these attributes to make sound decisions.