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Given the Equation of Exchange where MV = PQ, suppose that an economy is characterized by: M = $2 trillion V = 2.5 P =

Given the Equation of Exchange where MV = PQ, suppose that an economy is characterized by: M = $2 trillion V = 2.5 P = 1.0

Now assume that the Fed increases the money supply by 10 percent and velocity remains unchanged. b. If the price level remains constant, by how much will real output increase?

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