The Quantity Theory of Money Predicts That,in the Long Run,inflation

question 111

Multiple Choice

The quantity theory of money predicts that,in the long run,inflation results from the

• A)velocity of money growing at a faster rate than real GDP.
• B)velocity of money growing at a lower rate than real GDP.
• C)money supply growing at a lower rate than real GDP.
• D)money supply growing at a faster rate than real GDP.

---

Definitions:

Non-Cancelable

A term used in contracts and agreements indicating that the contract cannot be canceled or terminated by the parties involved without consequences.

Nonrenewable

Resources or energy sources that cannot be readily replaced by natural means at a pace quick enough to keep up with consumption.

Implicit Rate

The interest rate inherent in a lease, not explicitly stated, used to determine lease payments.

Incremental Borrowing Rate

The incremental borrowing rate is the interest rate a company would have to pay if it borrows additional funds.