According to the Quantity Theory of Money,if the Money Supply

question 129

Multiple Choice

According to the quantity theory of money,if the money supply grows at 6%,real GDP grows at 2%,and the velocity of money is constant,then the inflation rate will be

• A)8%.
• B)6%.
• C)4%.
• D)2%.

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Definitions:

Futures Contract

A contractual arrangement committing to the purchase or sale of a specific financial asset or commodity at an agreed price, set to occur at a future date.

Short-Sale

A trading strategy that involves selling borrowed securities with the expectation of buying them back at a lower price to profit from a decline in their value.

LIBOR

The London Interbank Offered Rate, previously a benchmark interest rate at which major global banks lend to one another.

Bankers' Acceptances

Short-term debt instruments issued by a company that is guaranteed by a commercial bank, commonly used in international trade.