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Mumz [18]
3 years ago
12

Suppose the real GDP of this economy grows at an annual rate of 5%. Assume that the central bank would like to keep the inflatio

n rate at 2% per year. If the velocity of money remains constant, the central bank can achieve its goal by pursing an annual money growth rate of____________-.
Business
1 answer:
evablogger [386]3 years ago
7 0

Answer:

The correct answer is 7%.

Explanation:

The real GDP of an economy is said to be increasing at an annual rate of 5%.  

The inflation rate is kept low at 2%.  

The velocity of money is assumed to be constant.  

In this situation, the annual money growth rate will be equal to the sum of the inflation rate and rate of growth of real GDP.  

Annual money growth rate

= Inflation rate + Real GDP growth rate

= 2% + 5%

= 7%

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maria [59]

Answer:

some goods aren't internationally traded

Explanation:

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It is used to measure and compare prices at different locations.

The purchasing power does not hold good in the short to the medium run as different countries produces different goods and as such all the goods are not internally traded all over the locations or countries.

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3 years ago
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Answer:

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Explanation:

hope this helps :)

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2 years ago
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Sergeeva-Olga [200]
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Naily [24]

Answer:

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4 0
3 years ago
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Alexxandr [17]

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Other types of definitions include:

Public opinion is an aggregation: Journalists and politicians claim public opinion is the total of a lot of individual opinions.

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4 years ago
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