Long-run macroeconomic equilibrium

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Consider a hypothetical economy that produces at its long-run macroeconomic equilibrium at a price level of 100.

Suppose the real GDP of this economy grows at an annual rate of 5%. Assume that the central bank would like to keep the inflation rate at 2% per year. If the velocity of money remains constant, the central bank can achieve its goal by pursing an annual money growth rate of?

Reference no: EM13832904

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