The inflation rate in Venezuela has increased between 2005 and 2010, rising from 14 percent per year to 31 percent per year. At the same time, the growth rate of real GDP fell from 10 percent per year to -2.6 percent per year
The quantity theory of money A) states that the inflation rate over the period would average 4 percent.
B) predicts that the velocity of money will decrease over the period.
C) states that the growth rate of money must have increased over the period.
D) predicts that nominal GDP will decrease over the period.
C
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Suppose people become so convinced that interest rates cannot fall further that they hold money rather than bonds. This situation is
A. known as a liquidity trap B. shown by making the aggregate demand curve steeper C. shown as a leftward shift in the investment demand D. known as crowding out
Increases in autonomous spending have an expansionary effect and make ________ levels of real income consistent with a given interest rate
A) lower B) higher C) constant D) none of the above.
In the income-expenditure framework, if planned aggregate expenditures are less than real gross domestic product (GDP), _____
a. saving will increase b. the price level will increase c. inventories will increase d. inventories will decrease e. consumption will decrease
GDP per capita
A. Indicates the most efficient use of resources. B. Is real GDP corrected for price level changes. C. Is equal to a nation's GDP divided by its population. D. Does not permit comparisons of the economic welfare of different nations.