If the quantity of money grows at 10 percent a year, the velocity of circulation is constant, and potential GDP grows at 5 percent a year, what is the inflation rate in the long run? The inflation rate in the long run is percent a year.

If the quantity of money grows at 10 percent a year, the velocity of circulation is constant, and potential GDP grows at 5 percent a year, what is the inflation rate in the long run? The inflation rate in the long run is percent a year.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 8SQP

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Question

If the quantity of money grows at 10 percent a year, the velocity of circulation is constant, and potential GDP grows at 5 percent a year, what is the inflation
rate in the long run?
The inflation rate in the long run is
percent a year.

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