Velocity in the Country of Shem Is Always Stable

question 95

Multiple Choice

Velocity in the country of Shem is always stable. In 2009, the money supply was $200 billion and the GDP price deflator was four times as high as it was in the base year. In 2010, the money supply increased to $240 billion, the price level increased by 15 percent, and nominal GDP equalled $1200 billion. By how much did real GDP increase between 2009 and 2010?

• A)20 percent
• B)4.35 percent
• C)2.17 percent
• D)There is not enough information to answer the question.

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Definitions:

Investment

The undertaking of investing resources, usually capital, with the foresight of amassing income or profits.

Months

Units of time, typically used to measure periods within a year, consisting of 28 to 31 days.

Invested

Assigning monetary assets with the prospect of gaining returns or profit.

Investment Value

The worth of an asset or security based on its potential to generate income, appreciation, or other benefits to an investor.