When we consider growth rates of the variables, the growth of the price level (inflation) is equal to:
A. growth in nominal GDP.
B. growth in real GDP.
C. growth of the monetary aggregate.
D. growth of the nominal supply of money minus the growth rate of real income.
Answer : D. growth of the nominal supply of money minus the growth rate of real income.
You might also like to view...
Average product is equal to
A) marginal product + total product. B) total product ÷ marginal product. C) total product ÷ quantity of labor. D) total product × quantity of labor. E) marginal product × quantity of labor.
What is an optimal decision?
What will be an ideal response?
The AS/AD model with sticky prices predicts that, in the long run, a reduction of the money supply results in:
a. lower prices and lower output. b. no change in prices and lower output. c. lower prices and no change in output. d. no change in prices or output.
In the long run, which of the following is true?
A. Profit effects are larger than cost effects. B. Cost effects offset price effects. C. Cost effects are larger than profit effects. D. None of the choices are correct.