Answered: inflation

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You have been tasked with advising the dictator of a nation over what he should do to increase the countries GDP. He suggests printing money and increasing the growth rate of the money supply. He wants to give this newly printed currency to his soldiers and best political supporters. You know this will not increase GDP in the long run because...

I. Money is neutral

II. Increasing the growth of the money supply only causes inflation in the long run

III. He would only increase GDP in the long run if he distributed the money equally to all citizens

IV. He would only increase GDP in the long run only if he printed a large enough sum of money

I, II, and III only

I, II, III, and IV

III only

I and II only

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