Question

According to the Quantity Theory of Money, a permanent increase in money velocity will increase inflation...

According to the Quantity Theory of Money, a permanent increase in money velocity will increase inflation permanently.

True or False

According to the Quantity Theory of Money, an unanticipated money-based inflation stabilization program that permanently reduces the money growth rate from 5 percent to 0 percent may cause deflation in the period the program is announced.

True or False

According to the Solow Growth Model, poorer countries grow faster.

True or False

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Answer #1

Statement 1st. is True.Because according to "Quantity Theory of Money" there is a fixed proportional realtionship between supply of money & the price level.So if there is parmanant increase in velocity of money there will be a paramnant inflation.

Statement 2nd is false. Because in stabilisation program,economy will be stablised,there will be no deflation.

Statement 3rd is true.Because Solow growth model predicts conditional convergence and the resultant will be more growth in poorer nation

Hope this will help you.If it really does then please give a thumbs up.

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