Suppose That Velocity and Output Are Constant, the Quantity Theory

question 30

Multiple Choice

Suppose that velocity and output are constant, the quantity theory and Fisher effect are correct, the nominal interest rate is 7 percent, and money growth is 2 percent. Which of the following is consistent with these facts?

• A)The real interest rate is 2 percent, and nominal wages are rising.
• B)The real interest rate is 2 percent, and real wages are rising.
• C)The real interest rate is 5 percent, and nominal wages are rising.
• D)The real interest rate is 9 percent, and real wages are rising.

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Definitions:

Internal Capacity

The collective resources, skills, and competencies available within an organization that enable it to perform effectively.

External Capacity

The abilities and resources available to an organization from external sources that can be used to achieve its goals and objectives.

Strategic Issues

Key factors or challenges that could significantly impact an organization's ability to achieve its goals, requiring management's attention and strategic planning.

Customer Benefit

The advantage or value that a buyer gains from purchasing and using a product or service, which meets their needs or desires.