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In an Economy in Which Velocity Is Constant and Real

Question 5

Multiple Choice

In an economy in which velocity is constant and real output grows at an average rate of 4 percent per year,a 4 percent average rate of growth in the money supply would result in:


A) a constant price level.
B) a slowly increasing price level.
C) a rapidly increasing price level.
D) constant real GDP.
E) constant nominal GDP.

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