If Real GDP Grows at 3 Percent a Year, the Quantity

question 46

Multiple Choice

If real GDP grows at 3 percent a year, the quantity of money grows at 5 percent a year, and the velocity of circulation is constant, then the price level must be

• A) increasing at 8 percent a year.
• B) decreasing at 8 percent a year.
• C) increasing at 2 percent a year.
• D) decreasing at 2 percent a year.
• E) increasing at 15 percent a year.

---

Definitions:

Standard Deviation

A numerical indicator that calculates the spread or divergence within a data set.

Psychological Investigator

A professional who conducts research and experiments to study the human mind and behavior.

Easily Tested Predictions

Hypotheses or forecasts that can be quickly and simply verified or disproven through experimental or observational methods.

Comprehensive Explanations

Detailed and thorough descriptions or clarifications that cover or include all aspects.