At what rate must in increase the money supply

Reference no: EM13189285

As a result of accelerated technological changes brought about by the internet and wireless technology, some economists believe that the long-run rate of growth of GDP in the US has risen to 4% per year. Additionally, due to innovations in the financial system, the velocity of money is rising at 2% per year. If the Fed wants to maintain a zero-inflation monetary policy, at what rate must in increase the money supply? What if they want to keep inflation at 2% per year?

Reference no: EM13189285

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