If Real GDP Grows by 3 Percent, the Velocity of Circulation

question 135

Multiple Choice

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

• A) 3 percent.
• B) 0 percent.
• C) -3 percent.
• D) -6 percent.
• E) 6 percent.

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