The growth rate of real GDP is 6.4%The growth rate of nominal GDP is 7.8%The nominal interest rate is 4.2%The real interest rate is 2.8%The money supply (M2) is $11,438(in billions) Use the information given above to calculate the inflation rate. According to the quantity theory of money, if in a year's time, real GDP grew from $10 trillion to $10.2 trillion, and nominal GDP for the same time period grew from $10 trillion to $10.5 trillion, what is the growth rate of money supply? And the inflation rate?

According to the quantity theory of money, inflation rate can be calculated as follows:

Answered: The growth rate of real GDP is 6.4% The…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The growth rate of real GDP is 6.4%

The growth rate of nominal GDP is 7.8%

The nominal interest rate is 4.2%

The real interest rate is 2.8%

The money supply (M2) is $11,438(in billions)

Use the information given above to calculate the inflation rate.

According to the quantity theory of money, if in a year's time, real GDP grew from $10 trillion to $10.2 trillion, and nominal GDP for the same time period grew from $10 trillion to $10.5 trillion, what is the growth rate of money supply? And the inflation rate?

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