Suppose Velocity Increases by 2 Percent and Potential GDP Grows

question 368

Multiple Choice

Suppose velocity increases by 2 percent and potential GDP grows by 4 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.

---

Definitions:

Collective Behavior

Actions and expressions that emerge spontaneously from a group of people in situations that are unstructured, uncertain, or out of the social norm.

Breakdown Theory

A sociological theory suggesting that social movements and collective action arise from the breakdown of traditional social structures and norms.

Riot

A form of civil disorder characterized by a group lashing out in a violent public disturbance against authority, property, or people.

Lynching

The act of killing someone, usually by hanging, without legal trial, often associated with racial violence and mob justice.