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Suppose money demand grows by about 5% per year and the dollar appreciates by about 1% per year. If the Fed has a target inflation

Suppose money demand grows by about 5% per year and the dollar appreciates by about 1% per year. If the Fed has a target inflation rate of 2%, they should

none of these are correct

increase the money supply by 7% per year

increase the money supply by 6% per year

increase the money supply by 8% per year since money and prices are proportional

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