In an Economy in Which Velocity Is Constant and the Same

question 123

Multiple Choice

In an economy in which velocity is constant and the same level of real output is produced year after year,a slow increase in the money supply would result in a:

• A)constant price level.
• B)slowly increasing price level.
• C)rapidly increasing price level.
• D)slowly increasing real GDP.
• E)rapidly increasing real GDP.

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Definitions:

Critical

Involving the objective analysis and evaluation of an issue in order to form a judgment; essential for problem solving and decision making.

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A type of mental disorder characterized by unhealthy pattern of thinking, functioning, and behaving, differing significantly from cultural norms.

Rigid

Lacking flexibility or the ability to bend, often referring to materials, structures, or attitudes that are inflexible or unyielding.

Inflexible

Lacking flexibility; unable to change or be adapted to different circumstances.