The Inflation Rate in Venezuela Has Increased Between 2005 and 2010

question 306

Multiple Choice

The inflation rate in Venezuela has increased between 2005 and 2010, rising from 14 percent per year to 31 percent per year. At the same time, the growth rate of real GDP fell from 10 percent per year to -2.6 percent per year. The quantity theory of money

• A) states that the inflation rate over the period would average 4 percent.
• B) predicts that the velocity of money will decrease over the period.
• C) states that the growth rate of money must have increased over the period.
• D) predicts that nominal GDP will decrease over the period.

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Definitions:

Aging Schedule

A method used in accounting to display the breakdown of receivables or payables by their due dates, helping businesses manage their cash flow.

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered or used but not yet paid for.

Credit Report

A document that contains a detailed history of an individual's or company's credit activities and current credit situation.

Risk Assessment

The identification, evaluation, and estimation of the levels of risks involved in a situation, followed by the coordination of resources to minimize, monitor, and control the probability or impact of unfortunate events.