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Assume that the quantity theory of money holds and that velocity is constant at 4. Output is fixed at its full-employment value of 18,000, and
Assume that the quantity theory of money holds and that velocity is constant at 4. Output is fixed at its full-employment value of 18,000, and the price level is 1.25. a. Determine the following: Real demand for money: 4500 (enter your response as an integer) Nominal demand for money: 5625 (enter your response as an integer) b. In this same economy the government fixes the nominal money supply at 10,000. With output fixed at its full-employment level and with the assumption that prices are flexible, what will be the new price level? P- (enter your response as a decimal rounded to two decimal places)
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