Suppose growth rate of Real GDP is 6% and the growth rate of velocity is 3%. If we wants to have a 5 % inflation rate, what should be the growth rate of money supply according to the predetermined-money-growth-rate-rule? b) If we increases money supply at a rate that is higher than the rate you found in part a, what will be the impact of that higher than required money growth?
Suppose growth rate of Real GDP is 6% and the growth rate of velocity is 3%. If we wants to have a 5 % inflation rate, what should be the growth rate of money supply according to the predetermined-money-growth-rate-rule? b) If we increases money supply at a rate that is higher than the rate you found in part a, what will be the impact of that higher than required money growth?
Chapter16: Monetary Policy
Section: Chapter Questions
Problem 15SQ
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Suppose growth rate of Real
b) If we increases money supply at a rate that is higher than the rate you found in part a, what will be the impact of that higher than required money growth?
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