Assume that money velocity is constant over time (vt = v for all t). Suppose that the money supply grows at 5% (0.05) while real GDP grows at 3% (0.03). ACcording to the quantitative theory of money, what should the inflation rate be? Round up to the second decimal point.
Assume that money velocity is constant over time (vt = v for all t). Suppose that the money supply grows at 5% (0.05) while real GDP grows at 3% (0.03). ACcording to the quantitative theory of money, what should the inflation rate be? Round up to the second decimal point.
Chapter16: Monetary Policy
Section: Chapter Questions
Problem 15SQ
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