A high rate of inflation is likely to cause a:
A. high nominal interest rate.
B. low nominal interest rate.
C. low rate of growth of nominal GDP.
D. decrease in nominal wages.
A. high nominal interest rate.
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If an economy has a velocity of circulation of 3, then
A) the quantity of money is 3 times real GDP. B) in a year the average dollar is exchanged 3 times to purchase goods and services in GDP. C) nominal GDP is 1/3 the size of the quantity of money. D) the quantity of money is $3 for every dollar of GDP.
If the price of a good is above its equilibrium level, then
a. quantity demanded exceeds the quantity supplied b. there will be an excess demand c. quantity supplied exceeds quantity demanded d. the price will have to increase to establish equilibrium e. demand will shift to the left