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The quantity of money demanded in the table must be in trillion of dollar. Question 4 The quantity of money supply is $1 billion, the

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The quantity of money demanded in the table must be in trillion of dollar.

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Question 4 The quantity of money supply is $1 billion, the price level is 1.1, and the real GDP is $10 billion. i) Determine is the velocity of circulation? (5 marks) i1 Assume monetary neutrality and the velocity is constant. Explain the effect of a 10% increase in the quantity of money supply on the price level and real GDP. Make sure to provide a complete illustration. (15 marks)

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