Suppose That Real GDP Grows by 3 Percent a Year

question 238

Multiple Choice

Suppose that real GDP grows by 3 percent a year, the quantity of money grows 5 percent a year, and velocity does not change.In the long run, the inflation rate equals

• A) 8 percent.
• B) 3 percent.
• C) 5 percent.
• D) 2 percent.
• E) 10 percent.

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