Suppose that the money supply grows at 5 percent. Suppose that real GDP or output grows at 7 percent. According to the Quantity Theory of Money, what should the inflation rate be? Please express your answers as a percentage. Also, make sure to round your answers to the nearest 100th decimal points. For example, write 2.67 for 2.67 percent.
Suppose that the money supply grows at 5 percent. Suppose that real GDP or output grows at 7 percent. According to the Quantity Theory of Money, what should the inflation rate be? Please express your answers as a percentage. Also, make sure to round your answers to the nearest 100th decimal points. For example, write 2.67 for 2.67 percent.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that the money supply grows at 5 percent. Suppose that real GDP or output grows at 7 percent. According to the Quantity Theory of Money, what should the inflation rate be? Please express your answers as a percentage. Also, make sure to round your answers to the nearest 100th decimal points. For example, write 2.67 for 2.67 percent.
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