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1. Let's consider a hypothetical economy where this year's money supply is Tk.100, nominal GDP is Tk. 40000 and real GDP is Tk. 5000.
a) What does the quantity theory of money say?
b) Calculate the price level.
c) Calculate the velocity of money.
d) Suppose the central bank changes the money supply so that the new money supply is Tk. 500, calculate the new price level.
e) Show stages b and d on a graph.
2. What is productivity? Describe the factors of productivity.
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