In the AD and Solow Growth Curve Model, a Shock

question 126

Multiple Choice

In the AD and Solow growth curve model, a shock that reduces the velocity of money by 2 percentage points causes

• A) a decrease of the inflation rate by 2 percentage points.
• B) a decrease of the inflation rate by less than 2 percentage points.
• C) an increase of the inflation rate by 2 percentage points.
• D) an increase of the inflation rate by less than 2 percentage points.

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