Suppose the money supply increases by 10 percent but velocity is not constant. Given this information, it follows that:
A. nominal GDP will increase by 10 percent.
B. nominal GDP will increase by more than 10 percent.
C. nominal GDP will increase by less than 10 percent.
D. the change in nominal GDP cannot be determined.
Answer: D
Economics
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When the actual real GDP exceeds the natural real GDP as in Figure 1-2 above, we expect to find that unemployment is
A) high and inflation is high. B) low and inflation is high. C) low and inflation is low. D) high and inflation is low.
Economics
A phase in the business cycle in which the economy's real GDP declines is known as:
a. a depression. b. a recession. c. a downtick. d. disequilibrium. e. limited demand.
Economics