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If the Money Supply Is Increasing at a Constant 8

Question 139

Multiple Choice

If the money supply is increasing at a constant 8 percent,velocity is constant,real GDP is increasing at 5 percent,and the inflation rate is 3 percent,which of the following is true?


A) The growth rate of GDP is too low to be maintained.
B) The inflation rate is too low to be maintained.
C) Velocity is too low to be maintained.
D) The money supply growth rate is too low to be maintained.
E) This situation can continue indefinitely.

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