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    Gross Domestic Product

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    Assume that the VM will turn over four times next year. If the country wants a GDP of $22 billion at the end of next year, what will have to be the size of the money supply? What percentage increase in the MS will be necessary achieve the target GDP?

    GDP = 20 MS = 5 VM=4

    © BrainMass Inc. brainmass.com October 5, 2022, 5:43 pm ad1c9bdddf
    https://brainmass.com/business/the-marketing-mix/gross-domestic-product-161237

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    SOLUTION This solution is FREE courtesy of BrainMass!

    GDP= MS*VM

    If GDP =22, VM=4 then
    MS= GDP/VM
    = 22/4
    MS= 5.5= Answer

    Percentage increase in the MS will be necessary achieve the target GDP=
    (New MS-Old MS)/OldMS
    =(5.5-5)/5
    =10%=Answer

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com October 5, 2022, 5:43 pm ad1c9bdddf>
    https://brainmass.com/business/the-marketing-mix/gross-domestic-product-161237

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