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Suppose that the central bank wants to stimulate the economy by increasing the money supply. The bankers estimate that the velocity of money is 3.7
Suppose that the central bank wants to stimulate the economy by increasing the money supply. The bankers estimate that the velocity of money is 3.7 and that the price level will increase from 189 to 203 due to the stimulus. Using the quantity equation of money, what will be the impact of a $720 billion dollar increase in the money supply on the quantity of goods and services in the economy given an initial money supply of $3.7 trillion? (Please round your answer to include 2 decimal places. Enter the amount in Billions, that is, If the total quantity decreases by 1 billion, enter your answer as -1.)
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