AP® Macroeconomics

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APR and rising interest rates

APMACR-XUCGD1

Consider an economy that has \$2 trillion money supply with no inflation. If annual GDP for that economy is \$20 trillion, then which of the following statements is true?

A

Workers should get COLA adjustments.

B

CPI is rising.

C

The government is running a deficit.

D

Velocity of money is 10.

E

The money has to change hands just 5 times to prevent inflation or economic slowdown.