The nation of Goldbug has a rapidly growing economy, and the velocity of money is not...

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The nation of Goldbug has a rapidly growing economy, and the velocity of money is not...

The nation of Goldbug has a rapidly growing economy, and the velocity of money is not changing, but the inflation rate is negative. You can conclude from this that...

Goldbug's central bank is buying Treasury Bills.

Goldbug's central bank is injecting too much money into the economy.

Goldbug's banking system lacks competition.

Goldbug's money supply must be growing slower than its real GDP.

business economics

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Answer 1

Answer #1

Here, the velocity of the money is constant and the economy or we can say Y is increasing, then inflation will be negative only when the money supply in the market is decreasing. the answer is "D". The money supply is glowing slower that its real GDp.

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