If the central bank wants to achieve a long-run target inflation rate of p, at what rate should the money supply grow?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
ChapterB: Differential Calculus Techniques In Management
Section: Chapter Questions
Problem 7E
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If the central bank wants to achieve a long-run target inflation rate of p, at what rate should the money supply grow?

Suppose that the money demand function takes
the form
(M/ P)ª = L(i, Y) = Y/(5i)
%3D
Transcribed Image Text:Suppose that the money demand function takes the form (M/ P)ª = L(i, Y) = Y/(5i) %3D
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