This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: If the quantity of money starts to grow more rapidly than real GDP and velocity does not change, the ... (Read 75 times)

urbanoutfitters

  • Hero Member
  • *****
  • Posts: 530
on: Jun 29, 2018
If the quantity of money starts to grow more rapidly than real GDP and velocity does not change, the result is
 
  A) slower growth in the price level.
  B) an increase in investment.
  C) more rapid growth in potential GDP.
  D) the inflation rate rises.
  E) an eventual slowing in the growth rate of the quantity of money.

Question 2

During periods when the inflation rate is positive, how does the real interest rate compare to the nominal interest rate?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

covalentbond

  • Sr. Member
  • ****
  • Posts: 336
Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

The real interest rate equals the nominal interest rate minus the inflation rate or, by rearranging, the nominal interest rate equals the real interest rate plus the inflation rate. This latter specification shows that when the inflation rate is positive, the nominal interest rate is greater than the real interest rate.


urbanoutfitters

  • Member
  • Posts: 530
Reply 2 on: Jun 29, 2018
:D TYSM

lindahyatt42

  • Member
  • Posts: 322
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

Did you know?

Vaccines prevent between 2.5 and 4 million deaths every year.

Did you know?

Certain topical medications such as clotrimazole and betamethasone are not approved for use in children younger than 12 years of age. They must be used very cautiously, as directed by a doctor, to treat any child. Children have a much greater response to topical steroid medications.

Did you know?

During the twentieth century, a variant of the metric system was used in Russia and France in which the base unit of mass was the tonne. Instead of kilograms, this system used millitonnes (mt).

Students and Money Students and Money
Fossil fuel emissions and climate change Fossil fuel emissions and climate change
Climate change affects organisms and ecosystems Climate change affects organisms and ecosystems
The roots of climate change The roots of climate change
A bus starts from restat a station and accelerates at a rate of 2 m/s^2 for 15 seconds. It then runs A bus starts from restat a station and accelerates at a rate of 2 m/s^2 for 15 seconds. It then runs
Grade 1 learn Canadian money Grade 1 learn Canadian money
Video: Types of Burns

For a complete list of videos, visit our video library