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:

Labeling

The process by which individuals or groups are assigned a label that defines them, often leading to societal stigma or stereotyping.

Differential Association

A theory in sociology positing that people pick up deviant behaviors from their close contacts who act as examples of and give chances for engaging in such behaviors.

Customary Norms

Rules of behavior that are based on long-standing practices or traditions within a society or group.

Informal Deviance

Behaviors that violate informal social norms or expectations, which are not codified into law.