the money supply of Freedonia this year is $150 billion nominal GDP is $750 billion .assuming that velocity of money is stable. real GDP gross 2%this year. and money supply does not change what are the velocity, price level, and inflation rate
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- How to measure core inflation? How is it estimated?7 Inflation is caused as a result of increase in the money supply. increase in the money supply without a corresponding increase in production. decrease in the money supply without a corresponding decrease in production. fall in production.D Inflation can impose significant costs and adversely distort economic systems. Indicate whether the costs and distorting effects exemplify menu costs, shoe leather costs or unit of account costs. a. discourages people from holding money c. can lead to stores listing prices in more stable currencies e. makes money a less reliable source of measurement g. causes difficulty in firms and individuals financial planning b. can reduce the quality of economic decisions d. spending time converting money into something that better holds value f. can cause distortion to the tax system h. causes costs associated with changing prices in stores