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According to the Quantity Theory a 5 Percent Increase in Money

Question 7

Multiple Choice

According to the quantity theory a 5 percent increase in money growth increases inflation by ___ percent. According to the Fisher equation a 5 percent increase in the rate of inflation increases the nominal interest rate by _____.


A) 1; 5
B) 5; 1
C) 1; 1
D) 5; 5

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