Industria specializes in the production of heavy machinery. It ...

[jessicacav]

Industria specializes in the production of heavy machinery. It exports machinery to the rest of the world and imports oil from the Gulf countries. Based on this information, we can conclude that Industria is a(n) ________ economy.
 
  A) closed B) communist C) command D) open

Question 2

What does the quantity theory of money imply? If the growth rate of money supply and growth rate of real GDP in an economy are 8 and 6, respectively, then what is the inflation rate in the economy?
 
  What will be an ideal response?

[TheDev123]

Answer to Question 1

D

Answer to Question 2

The quantity theory of money implies that inflation is equal to the gap between the growth rate of money supply and real GDP.
In this case, inflation rate = growth rate of money supply - growth rate of real GDP
= 8 - 6 = 2.