In the country of Orcam, the velocity of money is constant. Real GDP grows by 2 percent per year, the money stock grows by 10 percent per year, and the nominal interest rate is 15 percent. Calculate the growth rate of nominal GDP.

In the country of Orcam, the velocity of money is constant. Real GDP grows by 2 percent per year, the money stock grows by 10 percent per year, and the nominal interest rate is 15 percent. Calculate the growth rate of nominal GDP.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter14: Money And The Economy

Section: Chapter Questions

Problem 6WNG

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Question

In the country of Orcam, the velocity of money is constant. Real GDP grows by 2 percent per year, the money stock grows by 10 percent per year, and the nominal interest rate is 15 percent.

Calculate the growth rate of nominal GDP.

Definition Video Definition Overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period. Video

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