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Suppose that the real money demand function is: where Y is real output, ris the real interest rate, and z is the expected rate of
Suppose that the real money demand function is: where Y is real output, ris the real interest rate, and z is the expected rate of inflation. Real output is constant over time at Y = 150. The real interest rate is fixed in the goods market at r = 8% (0.08) per year. Suppose that the nominal money supply is growing at the rate of 12% (0.12) per year and that this growth rate is expected to persist forever. Currently, the nominal money supply is M = 500. What is the value of the real money supply? ID (enter your response rounded to two decimal places)
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