Consider the quantity theory of money. Suppose Vis constant, M is growing 10 % per year, is growing 2 % per year, and real interest rate is 5. a) Solve for nominal interest rate . b ) Find the change in nominal interest rate if the central bank decreases money growth to 5% . c) What are the causes of inflation in the quantity theory of money ? d ) Assume that the central bank increased the money supply. Under what conditions inflation will be zero. (Consider the quantity theory of money )

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