1. In 2019, Vietnamese economy's real GDP, Y, was 3,738.6 trillion Vietnamese dong, its GDP deflator, P, was 1.6, and its money supply, M^s, was 2,456.7 trillion dongs. The nominal interest rate, i, was 6 percent (i = 0.06), and the money market was in equilibrium. Money demand is represented by M^d = kPY/i, where k is the propensity to hold money.

(a) What was the propensity to hold money in Vietnam during 2019 (i.e., what was k)? Please round the answer to 4 decimal points and show your calculations.

(b)In 2020, because of COVID-19 pandemic Vietnam's real GDP growth slowed down, but still managed to grow at 2 percent. GDP deflator also grew by 2 percent, but the interest rate declined to 4 percent. If the propensity to hold money remained the same as in 2019, which you calculated in (a) above, by what percent money supply must have grown? Please express your answer as a percentage, round to one digit after the decimal point, and show your calculations. (For example, you would show 0.3456 as 34.6%)

(c) In question 1(b) in 2020 when the propensity to hold money remained the same as in 2019 and real GDP and the deflator grow both at the rate of 2 percent, if the central bank of Vietnam wanted to keep the nominal interest rate constant at 6 percent as in 2019, at what rate should it have increased the money supply? Assume no change in k and same changes in P and Y as in the setting for question 1(b). Please express your answer as a percentage, round to one digit after the decimal point, and show your calculations. (For example, you would show 0.3456 as 34.6%)