Using the Equation of Exchange, If Real GDP Increases by 3.0

question 50

Multiple Choice

Using the equation of exchange, if real GDP increases by 3.0%, the velocity of money grows by 1.0% and the growth rate of money is 3.0%; what is the rate of inflation?

• A) +1.0%
• B) It is constant or a 0% change
• C) It is the same as the growth rate of money, or 3.0%
• D) -1.0%

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