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Current inflation rate and nominal interest rate

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Reference no: EM131423827

Suppose real GDP is growing by 3 percent, the money supply is growing at 10 percent, the velocity of money is constant, and the real interest rate is 5 percent.

(a) What is the current inflation rate and nominal interest rate?

(b) If money supply growth rate increases to 15 percent, how will the answers in part a change?

Reference no: EM131423827

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