Here is some data on the economy of a certain country.Use this data for both parts of question 1.

M1 Money Supply: $565 Billion

Real GDP: $2,185 Billion

Velocity of M1 Money Supply: 4.1

Question 1a: Right now, what is the rate of inflation in that country? How can you tell?

Question 1b: If they want to change the inflation rate to about 2% (which the Fed says is ideal), can they do so by changing the Money Supply? Assuming the velocity stays the same, about how much should the Money Supply change to get to the inflation rate to 2%

Question 1c: Using the case given in question 1, what are some examples of action the Central Bank of that country could take to reduce the money supply?Explain how these examples would work. For this question, assume that the Central Bank of that country has tools for Monetary Policy similar to the tools used by the FOMC in the USA. (Notice that the previous sentence says "has tools for Monetary Policy similar to the tools used by the FOMC") You don't need specific numbers to answer this, just a clear and thorough explanation.