Suppose That Real GDP Grows by 3 Percent a Year

question 142

Multiple Choice

Suppose that real GDP grows by 3 percent a year, the quantity of money grows 6 percent a year, and velocity grows by 1 percent.In the long run, the inflation rate equals

• A) 9 percent.
• B) 4 percent.
• C) 5 percent.
• D) 12 percent.
• E) 10 percent.

---

Definitions:

Amenable

Willing to follow advice or authority; open and responsive to suggestion.

Scientific Test

A methodically organized procedure in science aimed at discovering, demonstrating, or testing a hypothesis or theory.

Demand Characteristics

Cues in an experimental environment that suggest to participants what behavior is expected, desired, or appropriate, potentially influencing their responses.

Experimenter Cues

Unintentional signals or behaviors from a researcher that can influence the responses or actions of participants in a study.