Which of the Following Formulas Gives You the Growth in Purchasing

question 102

Multiple Choice

Which of the following formulas gives you the growth in purchasing power?

• A)growth of money + growth of prices
• B)(1 + real rate)/ (1 + nominal rate)
• C)(1 + inflation rate)/ (1 + nominal rate)
• D)growth of money / growth of prices
• E)growth of money × growth of prices

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Definitions:

Instinct

An innate, typically fixed pattern of behavior in animals in response to certain stimuli that is primarily genetically coded.

Homeostasis

The self-regulating process by which biological systems tend to maintain stability while adjusting to conditions that are optimal for survival.

Steady State

A condition in which all aspects of a system are in equilibrium or unchanging over time, often used in physics and economics to describe stable systems.

William McDougall

An influential psychologist known for his work on social psychology, including the concept of the group mind and the role of instinct in human behavior.