Suppose the velocity of money is 10 transactions per year, the price level for 2015 is $4, and real GDP in 2015 is $9,000,000. If output grows by 10%, what will money supply should the central bank set in 2016 if they want price stability?
Suppose the velocity of money is 10 transactions per year, the price level for 2015 is $4, and real GDP in 2015 is $9,000,000. If output grows by 10%, what will money supply should the central bank set in 2016 if they want price stability?
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter14: Modern Macroeconomics And Monetary Policy
Section: Chapter Questions
Problem 4CQ
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Suppose the velocity of money is 10 transactions per year, the price level for 2015 is $4, and real GDP in 2015 is $9,000,000. If output grows by 10%, what will money supply should the central bank set in 2016 if they want price stability?
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