If M = $1,200 billion and V = 4, then total spending is _______________billion. Then velocity falls to 2 and M rises to $2,000 billion, so that total spending is now _______________ billion, and GDP has _________________
A) $4,800; $4,000; declined
B) $300; $1,000; risen
C) $4,800; $4,000; risen
D) $1,204; $2,002; risen
A
Economics
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What will be an ideal response?
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If the government uses stabilization policies to reduce inflation, the economy may have to suffer
a. higher rates of real GDP growth. b. higher rates of unemployment. c. lower rates of unemployment. d. higher rates of price level growth.
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