If Real GDP Increases at an Annual Rate of 4

question 67

Multiple Choice

If Real GDP increases at an annual rate of 4 percent and velocity increases at a rate of 2 percent per year,then rules-based monetary policy advocates who wish to maintain a stable price level would set the annual money supply growth rate at

• A) -2 percent.
• B) 0 percent.
• C) 1 percent.
• D) 2 percent.
• E) -1 percent.

---

Definitions:

Breach

The violation or failure to fulfill a duty, obligation, or promise, especially in terms of contract terms.

Warranty

A guarantee provided by the seller or manufacturer concerning the condition of its product, promising to repair or replace it if necessary within a certain period.

Incidental Damages

Compensation for unforeseen damages that occur as a secondary effect of a breach of contract.

Resell

The act of selling an item or asset previously bought, typically for profit.