If the Money Supply Is Constant When Both Nominal and Real

question 234

Multiple Choice

If the money supply is constant when both nominal and real GDP are rising, we can conclude that

• A) tax rates have been increased.
• B) the velocity of money must be increasing.
• C) interest rates are falling.
• D) the unemployment rate is rising.

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Definitions:

Interest Income

The revenue earned from lending funds or through investments in interest-bearing financial instruments.

New Brunswick

A province located on the east coast of Canada, known for its forested terrain and maritime industries.

Liquid

Refers to assets that can be easily converted into cash with minimal impact on their value.

Shareholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the ownership interest of shareholders.