10. Using money creation to pay for government spending

Consider Arcadia, a hypothetical country that produces only crab cakes. In 2019, a crab cake is priced at $6.00.

Complete the first row of the table with the quantity of crab cakes that can be bought with $1,100.

Hint: In this problem, assume it is not possible to buy a fraction of a crab cake, and alwaysround downto the nearest whole crab cake. For example, if your calculations result in 1.5 crab cakes, the answer should be 1 crab cake.

Year	Price of a Crab cake	Crab cakes Bought with $1,100
(Dollars)	(Quantity)
2019	6.00
2020

Suppose the government of Arcadia cannot raise sufficient tax revenue to pay its debts. In order to meet its debt obligations, the government prints money. As a result, the money supply rises by 30% by 2020.

Assuming monetary neutrality holds, complete the second row of the table with the new price of a crab cake and the new quantity of crab cakes that can be bought with $1,100 in 2020.

The impact of the government's decision to raise revenue by printing money on the value of money is known as the .