In the Long Run, If We Ignore Changes in Velocity

question 33

Multiple Choice

In the long run, if we ignore changes in velocity, inflation will:

• A) be zero.
• B) equal the rate of money growth.
• C) equal money growth less the growth in potential output.
• D) equal money growth plus the growth in potential output.

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Definitions:

Stock Put Option

A financial derivative that gives the holder the right, but not the obligation, to sell a stock at a specified price within a specified time period.

Stock Price

The price at which a particular stock is bought or sold on the market.

Put Contract

A financial contract giving the holder the right, but not the obligation, to sell a specific amount of an underlying asset at a set price within a specified time.

Put Premium

A Put Premium is the price that the buyer of a put option pays to have the right to sell a specified amount of an underlying asset at a set price before the option expires.