Business, 29.01.2022 17:00 Kameon

Suppose that this year's money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5 trillion. The price level is , and the velocity of money is . Suppose that velocity is constant and the economy's output of goods and services rises by 4 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will , and nominal GDP will . True or False: If the Fed wants to keep the price level stable instead, it should decrease the money supply by 4% next year. True False If the Fed wants an inflation rate of 11 percent instead, it shouldincrease the money supply by 13% . (Hint: The quantity equation can be rewritten as the following percentage change formula: (Percentage Change in M) (Percentage Change in V)

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Suppose that this year's money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is...