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Using the equation of exchange, explain the impact on inflation of a central bank policy change that causes to a 10% growth in money supply
Using the equation of exchange, explain the impact on inflation of a central bank policy change that causes to a 10% growth in money supply but with a corresponding 2% growth in output. Use simple notations to illustration your answer. How will your answer change if the economic grew by 8% (5 Marks).
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