Growth rate of money
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Is it possible to obtain the inflation rate, growth rate of money,and growth rate of nominal GDP with only the following information?
Constant velocity of circulation
real GDP growing at 3%
real interest rate growing at 2%
nominal interest rate at 7%.
https://brainmass.com/economics/inflation/growth-rate-money-29917
Solution Preview
Yes it is possible to obtain the inflation rate, growth rate of money,and growth rate of nominal GDP.
inflation rate
real interest rate = 2%
Nominal interest rate = 7%
(1+ nominal interest rate)= (1+ real interest rate) * ( 1+ inflation rate)
or (1+ 7%)= (1+ 2%) * ( 1+ ...
Solution Summary
The solution calculates inflation rate, growth rate of money,and growth rate of nominal GDP, given Constant velocity of circulation, real GDP, real interest rate, nominal interest rate.
$2.49