2. The equation of exchange and inflation; see lecture notes.

Fill in the blanks using the equation of exchange MV = Py and the definition Py = Y. Round answers to two decimal places.

case M V P y Y

1 ___ 5 ___ 800 640

2 144 5 ___ 800 ___

If case 2 is the same economy as case 1, but a year later, the inflation rate (percentage

increase in P over that year) was _______%.