Suppose a constant-money-growth-rate rule of 3 percent is being considered. If it is estimated that average annual Real GDP growth is 3.5 percent and it turns out that velocity is rising by 2 percent a year on average, the rule would produce an average annual rate of inflation of __________ percent

A) 1.5
B) 2.5
C) 3.0
D) 5.5
E) 2.0


A

Economics

You might also like to view...

Both the nominal rate of interest and the real return on investment increase with the inflation rate

Indicate whether the statement is true or false

Economics

Politicians face strong incentives to favor _____ over _____

a. the rich; the middle class b. special interests; the public interest c. the rationally ignorant; special interests d. the future; the present

Economics

Oligopoly is a market structure where one firm produces all of the output in the market

a. True b. False Indicate whether the statement is true or false

Economics

A legally mandated minimum wage is an example of:

A. the invisible hand principle. B. a price floor. C. a price ceiling. D. a fringe benefit.

Economics