Mainstream 17. Suppose that the money supply and the nominal GDP Are 100 billion and 500 billion, respectively. If the central bank reduces the money supply by $10 billion? By how much will nominal GDP have to fall to restore equilibrium, according to the monetarist perspective? Consider the following information for a hypothetical economy. Year 1 Money Supply = $200 billion LT annual growth of RGDP=2% Velocity of money = 3 suppose that velocity is constant and the economy Is initially operating at its FE level of RGDP 18. What is the level of nominal GDP in year ? 19. Suppose the FED adheres to a monetary rule. What will the FED have to do to the money supply between years 1 & 2 to keep P constant? 20. What policies are available to the FED to accomplish the necessary change in the money supply?