During Hyperinflation,because Real GDP and the Velocity of Money Can

question 108

Multiple Choice

During hyperinflation,because real GDP and the velocity of money can be assumed to be constant,the rate of ________ equals the rate of ________.

• A) growth of the money supply;growth of real GDP
• B) growth of consumption;inflation
• C) growth of the money supply;inflation
• D) growth of consumption;growth of real GDP
• E) growth of real GDP;change of the exchange rate

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Definitions:

Financial Capital

The funds that corporations and individuals use to invest in and finance new business ventures and operations.

Real Capital

Physical assets that are used in the production of goods and services, such as machinery, buildings, and equipment.

Vicious Circle

A complex sequence of negative events or conditions that reinforce each other, leading to a deteriorating situation or a series of worsening cycles.

Infrastructure Problem

Issues or challenges related to the basic facilities, services, and installations needed for the functioning of a community or society, like roads, bridges, and power supplies.