Suppose Velocity Increases by 2 Percent and Potential GDP Grows

question 275

Multiple Choice

Suppose velocity increases by 2 percent and potential GDP grows by 2 percent. The trend inflation rate will equal zero if the quantity of money grows by

• A) 0 percent.
• B) 2 percent.
• C) 4 percent.
• D) -2 percent.

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Definitions:

Root

A component of a plant usually situated under the ground, it functions to soak up water and nutrients from the soil.

Hydronephrosis

Swelling of a kidney due to a build-up of urine, often caused by an obstruction in the urinary tract.

Obstructed Outflow

A blockage that prevents the normal flow of fluids or substances within the body, typically referring to medical conditions affecting organs.

Nephrolithiasis

A medical condition characterized by the formation of kidney stones.