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Assume Nominal Money Supply Grows by 6% and Real GDP

Question 34

Multiple Choice

Assume nominal money supply grows by 6% and real GDP grows by 4%.We can conclude that the rate of inflation is about


A) +6%
B) +2%
C) +6% minus the percentage change in velocity
D) +2% minus the percentage change in velocity
E) +2% plus the percentage change in velocity

Correct Answer:

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