If Real GDP Grows by 3 Percent, the Velocity of Circulation

question 50

Multiple Choice

If real GDP grows by 3 percent, the velocity of circulation does not change, and the quantity of money grows by 5 percent, then in the long run the inflation rate is

• A)3 percent.
• B)2 percent.
• C)8 percent.
• D)-5 percent.
• E)-2 percent.

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