If Real GDP and the Velocity of Circulation Do Not

question 199

Multiple Choice

If real GDP and the velocity of circulation do not change and the quantity of money grows by 3 percent, then in the long the inflation rate is

• A) 3 percent.
• B) 0 percent.
• C) -3 percent.
• D) larger than than 3 percent.
• E) More information is needed to answer the question.