Question

11.Suppose that for a given year money growth is 10 percent, real GDP growth is 8 percent, and velocity is constant. According to the growth version of the quantity equation, the inflation rate would be
Select one:
a. -2 percent.
b. 1.25 percent.
c. 2 percent.
d. 18 percent.

12.An inflation rate greater than 50 percent per month is known as
Select one:
a. disinflation.
b. stagflation.
c. deflation.
d. hyperinflation.

13.If nominal wages increase by 5 percent while real wages fall by 1 percent, the inflation rate must be
Select one:
a. 1 percent.
b. 4 percent.
c. 5 percent.
d. 6 percent.

14.When the expected rate of inflation is added to the real interest rate, the result is called the
Select one:
a. preferred rate.
b. nominal interest rate.
c. adjustment rate.
d. differential rate.

15.When a government has a budget deficit and has reduced its spending, what other step can be taken to generate more revenue, besides issuing government bonds?
Select one:
a. reduce unemployment
b. raise interest rates
c. increasing exports
d. raise taxes