Solve it clearly and correctly. Answer completely. I will rate 1. A Work It Out In the country of Wiknam, the velocity of money is constant. RealGDP grows by 3 percent per year, the money stock grows by 8 percent per year, andthe nominal interest rate is 9 percent. What isa. the growth rate of nominal GDP?b. the inflation rate?c. the real interest rate?

a. According to quantity theory of money Growth rate of money stock + growth rate of velocity =…

Answered: Work It Out In the country of Wiknam,…

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: Money Growth And Intlation

Section: Chapter Questions

Problem 6PA

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Work It Out In the country of Wiknam, the velocity of money is constant. Real GDP grows by 3 percent per year, the money stock grows by 8 percent per year, and the nominal interest rate is 9 percent. What is a. the growth rate of nominal GDP? b. the inflation rate? c. the real interest rate?