Assuming That Velocity Is Stable, If Real GDP Grows by 10

question 164

Multiple Choice

Assuming that velocity is stable, if real GDP grows by 10 percent this year, and if the money supply does not change this year, how does the price level change?

• A)The inflation rate will be zero.
• B)The price level will fall by 9.09 percent.
• C)The price level will rise by 10 percent.
• D)The price level will rise by 9.09 percent.

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Definitions:

Precise

Marked by exactness and accuracy of expression or detail.

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Active Voice

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