Assuming That Velocity Is Stable, If Real GDP Grows by 10

question 8

Multiple Choice

Assuming that velocity is stable, if real GDP grows by 10 percent this year, and if the money supply does not change this year, how does the price level and nominal GDP change?

• A) The price level and nominal GDP will not change.
• B) The price level will not change but nominal GDP will grow by 10 percent.
• C) The price level will decrease by 10 percent and nominal GDP will stay the same.
• D) The price level and nominal GDP will increase by 10 percent.

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Definitions:

Sustainable Annualized

Reflects the ability to maintain performance or activity levels over a year considering current resources and capacities.

Long-Run Future

A perspective focusing on an extended period, considering long-term outcomes, trends, and potential impacts beyond immediate short-term considerations.

Free Cash Flow Valuation

A method to value a company based on the cash flows available after funding operations and capital expenditures.

Stock Analysts

Professionals who research and evaluate publicly traded companies, providing investment recommendations based on expected performance and market trends.