In the long run, the real interest rate is 3 percent, real GDP grows at 4 percent, velocity is constant, and the quantity of money grows at 8 percent. The nominal interest rate is
A) 7 percent. B) 12 percent. C) 10 percent. D) 8 percent. E) 6 percent.
A
You might also like to view...
Increasing environmental awareness in the United States has occurred with increasing GDP, which has reduced concerns about basic needs
a. True b. False Indicate whether the statement is true or false
Which of the following statements best describes an effect of tax cuts?
a. When the economy is doing extremely well, tax cuts may shift AD so far to the right as to generate inflationary pressures, with little gain to GDP. b. When the economy is doing extremely well, tax cuts may shift AD so far to the right as to generate inflationary pressures, with considerable gain to GDP. c. When the economy is doing extremely well, tax cuts may shift AD so far to the left as to generate inflationary pressures, with little gain to GDP. d. When the economy is doing extremely well, tax cuts may shift AD so far to the left as to generate inflationary pressures, with considerable gain to GDP.