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The Table Below Shows Data for Indonesia Between 2005 and 2006

Question 196

Multiple Choice

The table below shows data for Indonesia between 2005 and 2006.
20052006 Money growth rate 21.412.0 Real GDP growth rate 5.75.5\begin{array} { | l | l | l | } \hline & 2005 & 2006 \\\hline \text { Money growth rate } & 21.4 & 12.0 \\\hline \text { Real GDP growth rate } & 5.7 & 5.5 \\\hline\end{array}
Assume the rate of velocity change is constant. According to the quantity theory of money, Indonesia?s inflation rate


A) will increase over the 12 months.
B) is higher in 2005 than in 2006.
C) was 17.5 percent in 2006.
D) is 27.1 percent in 2005.

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