In section 8.5 of the textbook on the fiscal causes of high inflation, the government's budget constraint is given byG= T + B + .

Gis government expenditures,Tis total tax revenue,B is the net issuance of bonds (i.e. new bonds issued minus redemptions of old bonds), andMis the change in the money supply.

Suppose the budget deficit is 4% of GDP (denoted byY) and the net issuance of bonds is 1% of GDP. If the money supply is twice the size of GDP (i.e.M = 2Y), then the growth rate of the money supply is __________ percent. (Round to the nearest tenth.)

(Hint: Divide the budget constraint by GDP and rearrange terms. Multiply and divide byMin order to get an expression that includes the growth rate ofM, i.e.M/M.)