Consider two economies: A and B. If the gap between the growth rate of money supply and growth rate of real GDP is larger in country A than in country B, then according to the quantity theory of money:
A) the inflation rate will be lower in country A.
B) the inflation rate will be higher in country A.
C) real interest rates will be higher in country A.
D) nominal interest rates will be lower in country A.
B
You might also like to view...
Suppose a perfectly competitive industry is in long-run equilibrium. If a decrease in demand leads to a higher long-run price, we know that
A) this is a decreasing-cost industry. B) this is an increasing-cost industry. C) some firms will be losing money in the long run. D) after further adjustments, price will fall to its original level.
A corporation's shareholders are its:
a. board of directors. b. residual claimants. c. specialized active managers. d. supervisors.
Which of the following explains why banks try to keep their holdings of excess reserves low?
A. To escape Fed penalties. B. To please bank examiners. C. To keep the money multiplier low. D. To maximize profits.
Hard work does not necessarily lead to a high income.
A. True B. False