Suppose residents of the imaginary land of Angria use rubies as money. Every ruby is used, on an average, 7 times per year to carry out transactions. The total supply of rubies is fifty million.

a)Suppose a new financial product named "bonds" introduced in economy of Angria. How the introduction of this new financial product will affect the willingness to hold rubies (money) and consequently the velocity of rubies (money).

Countries

Argentina

Bolivia

Chile

Mexico

Inflation rate

10.88%

5.59%

3.20%

4.36%

Money growth rate

27.92%

34.12%

12.76%

11.44%

B)Do the data reported in above table support the quantity theory of money? Explain your answer with the help of the graph