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Let's consider a hypothetical economy where this year's money supply is $400, nominal GDP is $20000 and real GDP is $5000. a) Calculate the price

Let's consider a hypothetical economy where this year's money supply is $400, nominal GDP is $20000 and real GDP is $5000.

a) Calculate the price level.

b)Calculate the velocity of money.

c) Suppose the central bank changes the money supply so that the new money supply is $200, calculate the new price level.

d) Show stages b and d on a graph.

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