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Suppose the United States money supply grows by 7%, velocity grows by 3%, Real GDP grows by 5%, and price level grows by 5%. Ceteris
Suppose the United States money supply grows by 7%, velocity grows by 3%, Real GDP grows by 5%, and price level grows by 5%. Ceteris paribus, what will happen to both Real GDP and price levels in the long run if a negative shock reduces money supply growth to 3%?
4. If the reserve ratio is 15%, what is the money multiplier?
5. If the reserve ratio remains at 15%, how much money will a deposit of $300 create?
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