In the mid-1980s, velocity "fell off the rails," growing much slower than its historical trend of 3.4 percent. Had the Fed assumed a constant growth rate of 3
4 percent and maintained a constant growth rate of money supply rather than increasing the growth rate of the money supply as it did, A) nominal GDP would have grown more slowly as would real GDP.
B) nominal and real GDP would have grown more rapidly.
C) nominal GDP would have grown more rapidly faster and GDP would have grown more slowly.
D) real GDP would have grown more rapidly faster and nominal GDP would have grown more slowly.
A
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If the real wage is equal to 8 widgets, and only an integer number of workers can be hired, the Gizmo company should hire
A) 2 workers. B) 3 workers. C) 4 workers. D) 5 workers.
Competition best describes a market failure that provides an economic rationale for government intervention in markets
Indicate whether the statement is true or false