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

question 58

Multiple Choice

If real GDP grows by 3 percent, the velocity of circulation grows by -4 percent, and the quantity of
Money grows by 3 percent, then in the long run the inflation rate is

• A)-4 percent.
• B)-1 percent.
• C)4 percent.
• D)10 percent.
• E)1 percent.

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Definitions:

Criticism Fear

The unease or anxiety about being judged, disapproved of, or negatively evaluated by others.

Rationalizing

The process of attempting to explain or justify behavior or an attitude with logical reasons, even if these are not appropriate.

Underutilizing

Not making the most effective or efficient use of a resource, person, or capability.

Overloading

A situation where an individual or system is given more work or information than can be handled comfortably or efficiently.