Author Question: In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is ... (Read 80 times)

krzymel · **on:** Jun 29, 2018

In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 6 percent. The nominal interest rate is

A) 3 percent. B) 10 percent. C) 5 percent. D) 6 percent. E) 4 percent.

Question 2

In an economy with no income taxes or imports, if the multiplier is 5, what does the MPC equal?

A) 0.9 B) 0.2 C) 0.4 D) 0.8 E) 0.5