In an Economy in Which Real Output Grows at an Average

question 71

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) an inflation rate of 4 percent, if velocity were constant.
• B) an inflation rate of −4 percent, if velocity were constant.
• C) a $4 increase in the price level per year.
• D) a $4 decrease in the price level per year.

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Definitions:

Radial Artery

A major artery in the forearm that supplies blood to the lateral aspect of the hand and the thumb.

Coronary Artery

An artery supplying blood to the heart muscle itself, essential for providing oxygen and nutrients.

Subclavian Artery

A major artery that supplies blood to the thorax, upper limbs, and head.

Anterior Tibial Arteries

Arteries that supply blood to the front part of the lower leg and foot.