Prices have been steadily increasing over the last few years

Assignment Help Business Economics

Reference no: EM131096152

Arkensland is a highly industrialized countr. Prices have been steadily increasing over the last few years and inflation reached an all-time high of 8 % last year. Following this, the central bank came under pressure to reduce inflation to least 4 % in this year. With real GDP expected to grow at 2% this year, the finance minister suggested that the central bank should ensure that money supply growth in the current year is not more than 6%. However, inflation at the end of this year turned out to be higher than 4%, even though real GDP grew at 2% and money supply growth was restricted to 6%. Which of the following can most reasonably be inferred from the above information? A. The velocity of money increased this year. B. There is a risk of hyperinflation in Arkensland. C. The growth of GDP in Arkensland has stagnated. D. The central bank of Arkensland must have sold bonds this year in order to reduce the money supply.

Reference no: EM131096152

Questions Cloud

Motivation for trade in an economic perspective : In relation to trade, give real examples as the motivation for trade in an economic perspective.

Give a summary of each of the medicare plan options : What were the most difficult parts of the assignment? Think about the 65+ year olds who are making these decisions every day. What are the most important learning lessons to take from this assignment? How can you use this information?

The three promotions differ in effectiveness : Refer to the cracker promotion example on page 926. A student stated, in discussing this case: "Strictly speaking, you cannot conclude anything about whether the three promotions differ in effectiveness because there was no control.

Did the amount of cash in-crease or decrease : In a recent business transaction, land was exchanged for cash. Did the amount of cash in-crease or decrease - One entity sold land. The other entity bought land. For the entity that sold land, cash increased. For the entity that bought land, cash d..

Prices have been steadily increasing over the last few years : Arkensland is a highly industrialized countr. Prices have been steadily increasing over the last few years and inflation reached an all-time high of 8 % last year. Following this, the central bank came under pressure to reduce inflation to least 4 % ..

The main challenges facing the health system now : The main challenges facing the health system now; the factors that determine the production and distribution of health services; government policies for the health sector; the contribution of the policy of the government in the health sector and the ..

The nature of covariance model : Portray, analogously to the format of Figure 1.6 on page 11 for a regression model, the nature of covariance model (22.3) when there are three treatments and the parameter values are:

What are steps involved in conducting comparable valuations : Explain how "relative valuation" works. What are the primary steps involved in conducting comparable valuations? Give some examples of common valuation "multiples" used.

What is the pillar of evolutionary advancement why : Why do you think that sexual reproduction is considered a pillar of evolutionary advancement? Practically all species (except the most simple) have the ability to reproduce sexually

User Account

All Pages