Question 4 (15 points). Suppose that in an economy in a given year, the money supply increases

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Question 4 (15 points). Suppose that in an economy in a given year, the money supply increases 12%, velocity of money decreases 4%, the price level increases 5%, and real interest rate is constant at 2%.

a. (9 points). How much is the growth rate of real GDP? Why?

b. (6 points). How much is the nominal interest rate? Why?

Posted Date: Jun 22, 2024 03:03 AM

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Question 4 (15 points). Suppose that in an economy in a given year, the money supply increases

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