The table gives estimates of the rate of the M2 money supply growth and the rate of

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The table gives estimates of the rate of the M2 money supply growth and the rate of real GDP growth for five countries in 2014:

Rate of Growth in Money Supply (M2) +7.4 percent -2.5 percent +29.8 percent +3.0 percent +5.2 percent Rate of Growth of


a. If you were a monetarist, what would you predict about the rate of inflation across the five countries?
b. If you were a Keynesian and assuming activist central banks, how might you interpret the same data?

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Principles of Macroeconomics

ISBN: 978-0134078809

12th edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

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