For a given aggregate demand curve,the specified rate of spending growth is the growth rate of money:
A) supply plus the growth in velocity.
B) demand plus the growth in velocity.
C) supply minus the rate of growth in velocity.
D) demand minus the rate of growth in velocity.

Question

Quizplus · Accepted Answer

The specified rate of spending growth is equal to the growth rate of money supply plus the growth in velocity (the speed at which money is exchanged in the economy). Therefore, option A is the correct answer. Option B is incorrect because the growth rate of demand is not a factor in determining the specified rate of spending growth. Options C and D are also incorrect because they do not account for the growth rate of money supply, which is a crucial determinant of aggregate demand.

For a Given Aggregate Demand Curve,the Specified Rate of Spending