Question 3 In the country of Bithynia, the velocity of money grows at 10 percent per year. The growth rate of real GDP grows by 4 percent per year, and that of the money supply is 16 percent per year. Given that the nominal interest rate is 8 percent, what is the real interest rate?

Question 3 In the country of Bithynia, the velocity of money grows at 10 percent per year. The growth rate of real GDP grows by 4 percent per year, and that of the money supply is 16 percent per year. Given that the nominal interest rate is 8 percent, what is the real interest rate?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter14: Money And The Economy

Section: Chapter Questions

Problem 5WNG

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