Higher rates of anticipated inflation would tend to:
A)increase velocity and decrease nominal GDP.
B)increase velocity and increase nominal GDP.
C)decrease velocity and decrease nominal GDP.
D)decrease velocity and increase nominal GDP.

Question

Higher rates of anticipated inflation would tend to:​
A)​increase velocity and decrease nominal GDP.
B)​increase velocity and increase nominal GDP.
C)​decrease velocity and decrease nominal GDP.
D)​decrease velocity and increase nominal GDP.

Quizplus · Accepted Answer

Higher rates of anticipated inflation tend to increase the velocity of money because people are more likely to spend their money quickly before it loses value. This increased spending can lead to an increase in nominal GDP, as the overall level of prices and economic activity rises.

Higher Rates of Anticipated Inflation Would Tend To:​

Higher Rates of Anticipated Inflation Would Tend To: