In an Economy in Which Real Output Grows at an Average

question 124

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 the velocity of money in circulation is constant.
• B) inflation rate of -4 percent, if the 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:

Service

The action of helping or doing work for someone, or a system supplying a public need such as transport, communications, or utilities.

Statute Of Frauds

A legal concept that requires certain types of contracts to be executed in writing and signed by the party to be charged, in order to be legally enforceable.

Void

refers to something that is legally declared to be null and without effect, as if it never existed or happened.

Adult Child

A term used to describe adults who have not assumed traditional adult responsibilities or roles, often due to psychological or social factors.