Suppose the statistical office of a country does a poorjob in measuring inflation and reports an annualizedinflation rate of 4% for a few months, while the trueinflation rate has been 2.5%. What will happen to thecentral bank’s credibility if it is engaged in inflation targeting and its target is around 2%?

State whether the following statements are true, false, or uncertain and explain.  -Over the past 30 years, country A experienced an average money growth rate of 5 percent and an average inflation rate of 4 percent. This pattern is inconsistent with the quantity theory of money (QTM)   -Chase Bank removed the ATM machine located in the lobby of Susan’s building. The Baumol-Tobin model of money demand predicts that Susan’s demand for money will go up

Suppose velocity increases by 2 percent and potential GDP grows by 4 percent. The trend inflation rate will equal zero if the quantity of money grows by -2 percent. 4 percent. 0 percent. 2 percent.

With a current inflation rate of 1.8%, Real GDP = $23,450, and Potential Real GDP = $22,900, what is the appropriate Federal Funds Rate According to the Fed?

What is the quantitative theory of money? What are its components? If the Fed wants to have zero inflation, does it need to have zero money growth in a world where real GDP growth is 1% and velocity growth is -1%?

Over the past 12 years, Zambia has experienced an inflation rate of 9.8% per year. What does this suggest about the growth of Zambia's money stock according to the Quantity Theory of Money?        Zambia's money stock has decreased by 9.8 percent per year over the past 12 years.       Zambia's money stock has increased by 0.817 percent per year over the past 12 years.       Zambia's money stock has increased by 9.8 percent per year over the past 12 years.       Zambia's money stock has decreased by 0.817 percent per year over the past 12 years.

Suppose the velocity of circulation (V) is constant. The annual growth rate of real GDP is 3%. The money supply grows by 5% per year. Suppose the nominal interest rate is 1%, how much is the real interest rate?

Suppose that the money supply grows at 5 percent. Suppose that real GDP or output grows at 7 percent. According to the Quantity Theory of Money, what should the inflation rate be? Please express your answers as a percentage. Also, make sure to round your answers to the nearest 100th decimal points. For example, write 2.67 for 2.67 percent.   Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Suppose the inflation rate is zero, the income elasticity of money demand is 0.75, and the interest elasticity of money demand is -0.25. Determine the inflation rate that results from each of the following events (starting back at zero for each one). Enter all answers as integers with no decimal places. If negative, be sure to include the minus sign before the number (no spaces). iv. Nominal money supply increases 5% and the interest rate rises from 5% to 10%.The inflation rate is now %? v. Nominal money supply increases 3%, the interest rate rises from 3% to 6%, and real income increases 16%. The inflation rate is now %?

If the quantity of money grows at 10 percent a year, the velocity of circulation is constant, and potential GDP grows at 5 percent a year, what is the inflation rate in the long run? The inflation rate in the long run is percent a year.