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Given (1+gm)*(1+gv)= (1+gp)*(1+gy) and gv=0 gm is the growth of the money stock; gv= 0; gp is the growth of the price level and
Given (1+gm)*(1+gv)= (1+gp)*(1+gy) and gv=0 gm is the growth of the money stock; gv= 0; gp is the growth of the price level and gy is the growth of real GDP. Assume gpgy=0. If the real economy does not change but the money supply increases by 2%, how much does the price level increase by?
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Foundations of Macroeconomics
Authors: Robin Bade, Michael Parkin
6th edition
132831007, 978-0132831000
