According to the quantity theory of money:
A) when the gap between the growth rate of money supply and the growth rate of real GDP widens, inflation decreases.
B) when the gap between the growth rate of money supply and the growth rate of real GDP widens, inflation increases.
C) when the gap between the growth rate of money supply and the growth rate of real GDP widens, nominal interest rates decrease.
D) when the gap between the growth rate of money supply and the growth rate of real GDP widens, real interest rates increase.
B
You might also like to view...
A reduction in tax expenditures _____
a. will cause tax revenues to rise b. will cause government spending on social policy to rise c. will cause inflation to rise d. will reduce the tax base
Describe what is likely to happen to the average price of a share of stock if the stock markets decide to close every Friday and Monday to provide workers at the exchanges with longer weekends.
What will be an ideal response?
Some firms in monopolistically competitive markets differentiate their products by their physical characteristics.
Answer the following statement true (T) or false (F)
Answer the following statements true (T) or false (F)
1. In terms of trade volume, China is the largest trading partner of the United States. 2. In 2011, the United States was the largest exporter in the world. 3. Among the principal exports of the United States are agricultural products. 4. The United States can be classified as an "open" economy in that foreign trade accounts for more than 50% of its GDP. 5. The U.S. has a sizable trade surplus in services.