Suppose the Velocity of Circulation Increases by 4 Percent and Potential

question 218

Multiple Choice

Suppose the velocity of circulation increases by 4 percent and potential GDP grows by 3 percent. The trend inflation rate will equal zero if the quantity of money grows by

• A) 0 percent.
• B) 1 percent.
• C) 4 percent.
• D) 3 percent.

---

Definitions:

Production Location

The place or geographical area where goods or services are manufactured or assembled.

Organizational Hierarchy

The arrangement of individuals within an organization according to power, status, and job functions, creating a structured chain of command.

Company's Product

Goods or services offered by a company to its customers, representing the output of the company's business activities.

Weight-to-Volume Ratio

A measurement indicating how much weight occupies a certain volume, important in fields like shipping and material science.