In an Economy in Which Real Output Grows at an Average

question 96

Multiple Choice

In an economy in which real output grows at an average rate of 3 percent per year,a 7 percent average rate of growth in the money supply would result in a(n) :

• A)inflation rate of 4 percent,if velocity of money in circulation is constant.
• B)inflation rate of -4 percent,if velocity of money in circulation is constant.
• C)$7 increase in the price level each year.
• D)$7 decrease in the price level each year.
• E)increase in the velocity of money in circulation.

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Definitions:

Percentage Points

A unit for the difference of percentages, referring to the absolute difference between values in percentage terms, not the relative difference.

Social Desirability

The tendency of respondents to answer questions in a manner that will be viewed favorably by others, often leading to bias in survey research.

Survey Respondents

Individuals who provide data or answers to questions as part of a survey, contributing to research or assessments of opinions, behaviors, or demographics.

Push Polling

A controversial polling technique used to influence or alter the view of respondents under the guise of conducting a survey.