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Suppose That the Nominal Quantity of Money Is $200 Billion

Question 509

Multiple Choice

Suppose that the nominal quantity of money is $200 billion and the value of nominal GDP is $1 trillion. It must be the case that


A) there will be a shortage of money balances in the economy.
B) the economy is suffering from inflation.
C) the average price paid for a ʺtypicalʺ good is $5.
D) the velocity of circulation is 5.

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