If Velocity Does Not Change and the Quantity of Money

question 25

Multiple Choice

If velocity does not change and the quantity of money grows at the same rate as does real GDP, then in the long run

• A) the inflation rate equals the growth rate of the quantity of money.
• B) the nominal interest rate is less than the real interest rate.
• C) the real interest rate is less than the nominal interest rate.
• D) the inflation rate equals zero.
• E) the nominal interest rate equals zero.

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Definitions:

Self-reinforcement

The practice of rewarding oneself for reaching goals or completing tasks, which can motivate and reinforce desired behaviors.

Self-leadership

A process whereby individuals influence themselves to achieve self-direction and self-motivation required to perform tasks.

Empowerment

The process of giving individuals or groups the authority, confidence, and means to increase their control over their own lives or work.

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The practice of periodically moving employees between different tasks or jobs to reduce monotony and develop a wider range of skills.