Growth rate of money
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