Ceteris paribus, suppose the money supply greww at an average annual compounded rate of 7%, velocity was constant, the nominal interest rate averaged 4%, and real output grew at an average annual rate of 3%. According to the Quantity Theory of Money, inflation averaged per annum, and the real interest rate was Select one: O a. 7%; 0%. O b. 3%; 3%. O c. 7%; 4%. O d. 4%; 0%.

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Ceteris paribus, suppose the money supply grew at an average annual compounded rate of 7%, velocity was constant, the
nominal interest rate averaged 4%, and real output grew at an average annual rate of 3%. According to the Quantity Theory
of Money, inflation averaged
per annum, and the real interest rate was
Select one:
O a. 7%; 0%.
O b. 3%; 3%.
O c. 7%; 4%.
O d. 4%; 0%.
Transcribed Image Text:Ceteris paribus, suppose the money supply grew at an average annual compounded rate of 7%, velocity was constant, the nominal interest rate averaged 4%, and real output grew at an average annual rate of 3%. According to the Quantity Theory of Money, inflation averaged per annum, and the real interest rate was Select one: O a. 7%; 0%. O b. 3%; 3%. O c. 7%; 4%. O d. 4%; 0%.
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