SwiftyCompany is considering two capital investment proposals. Estimates regarding each project are provided below:
1 answer:
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Answer: c. 50%
Explanation:
I included a picture of the question to show you the rest of it as it is in graph form.
We can use the Quantity Theory if money to answer this.
It holds that MV = PY
M = quantity of money,
P = the price level,
Y = total output
V = velocity,
According to the theory, a change in M would lead to a change in P if V and Y are held constant.
Inflation would therefore be the change in M in percent.
= 15000 - 10 000 / 10 000
= 0.50 * 100
= 50%
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