Use the Quantity Theory of Money equation to solve the following: If the velocity of circulation is constant, real GDP is growing at 4.5 percent a year, the real interest rate is 2.1 percent a year, and the nominal interest rate is 5.7 percent a year. Inflation is as computed in the previous question. The growth of money is %.

Money velocity in the country of Ecoland is always stable. In 2019 (the base year), the money supply was $250 billion. In 2020, the money supply increased to $350 billion, the price level increased by 25 percent, and nominal GDP equaled $1400 billion. By how much did real GDP increase between 2019 and 2020?   A) $15 billion     B) $ 50 billion     C) $12.5 billion     D) $150 billion

What are the three basic functions of momey? Describe how rapid inflation can undermine money's ability to perform each of the three functions.

21.According to the quantity theory of money, ultimate control over the rate of inflation in the United States is exercised by: A)the Organization of Petroleum Exporting Countries (OPEC). B)the U.S. Treasury. C)the Federal Reserve. D)private citizens. 22.According to the quantity theory of money, if money is growing at a 10 percent rate and real output is growing at a 3 percent rate, but velocity is growing at increasingly faster rates over time as a result of financial innovation, the rate of inflation must be: A)increasing. B)decreasing. C)7 percent. D)constant. 23.If the money supply increases 12 percent, velocity decreases 4 percent, and the price level increases 5 percent, then the change in real GDP must be ______ percent. A)3 B)4 C)9 D)11 24.Percentage change in P is approximately equal to the percentage change in: A)M. B)M minus percentage change in Y. C)M minus percentage change in Y plus percentage change in velocity. D)M minus…