Suppose That for a Given Year Money Growth Is 12

question 28

Multiple Choice

Suppose that for a given year money growth is 12 percent, real GDP growth is 4 percent, and velocity is constant. According to the growth version of the quantity equation, the inflation rate would be

• A) 0.67 percent.
• B) 3 percent.
• C) 8 percent.
• D) 16 percent.

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Definitions:

Hypothetical Nations

Imaginary or theoretical countries used for analysis or discussion in economic studies and models.

Tariffs

Taxes imposed on imported goods and services, primarily used to protect domestic industries and to generate revenue.

Revenue Tariffs

Taxes imposed by governments on imported goods with the primary purpose of generating revenue rather than protecting domestic industries.

Protective Tariffs

Import taxes imposed by countries to protect domestic industries from foreign competition by making imported goods more expensive.