19. "Inflationary policies can spur growth for a time, which is why politicians have often found them so tempting. This is the best argument for making central banks ......" Complete this clipping. 52

a) independent b) subject to regulations

c) under the control of elected officials d) responsible for economic growth

Suppose income is $800 billion, the price index is 120 (base year 1992), inflation is 10 percent, the long-run real rate of growth is 2 percent, and the current money supply is $200 billion.

20. Real (1992 dollars) income is

a) $700b or less b) more than $700b but not more than $800b

c) more than $800b but not more than $900b d) more than $900b

21. Velocity is

a) 3 or less b) more than 3 but not more than 4

c) more than 4 but not more than 5 d) more than 5