In an all-currency economy in which real output and the real interest rate are fixed and the rates of money growth and inflation are constant, the inflation rate equals
A) the real interest rate.
B) the nominal interest rate.
C) the growth rate of the nominal money supply.
D) the level of real seignorage revenue.
C
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The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the total subsidy paid to tomato farmers?
A) area E B) area B + area C + area D + area F C) area C + area D + area E + area G D) area A E) area F
Monopolistically competitive firms
A) have market power because they can set price above marginal cost. B) have no market power because they earn zero economic profit. C) have no market power because of free entry. D) have no market power because price equals marginal cost.