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Consider country M with money supply equal to $2 trillion, nominal GDP of $20 trillion, and real GDP of $8 trillion. (a). What is the
Consider country M with money supply equal to $2 trillion, nominal GDP of $20 trillion, and real GDP of $8 trillion. (a). What is the velocity of money and price level in this economy? (b). Over the next one year the real GDP rose from $8 trillion to $8.4 trillion, while the money supply rose to $2.1 trillion. If the velocity is stable what is the expected inflation rate in this economy based on the quantity theory
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