Suppose the money growth rate is 3 percent, velocity is constant, and real GDP is growing at 2 percent. What is the inflation rate?
A) 1 percent
B) 5 percent
C) 3 percent
D) 6 percent
A
You might also like to view...
The principal-agent problem in corporations exists because the managers of a firm
A) may pursue their own goals even when the result is lower profit for owners. B) may know how to operate the business better than absentee owners do, and yet not be allowed to. C) are generally unable to do the monitoring that would result in the firm's avoiding moral hazard problems. D) are generally unable to do the monitoring that would result in the firm's avoiding adverse selection. E) are generally unable to monitor workers, who do not care about the profits due the managers.
Every firm that has the ability to affect the price of the good or service it sells will
A) have a perfectly elastic demand curve. B) have a marginal revenue curve that lies below its demand curve. C) earn a short-run profit but break even in the long run. D) shut down in the short run.