The link between Money Supply and Inflation - Economics Help
11:10
economicshelp.org
The link between Money Supply and Inflation - Economics Help
An explanation of how an increase in the money supply causes inflation - using diagrams and historical examples. Also an evaluation of cases when increasing money supply doesn't cause inflation
Jul 26, 2022
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SOLVED:Using the quantity theory of money, suppose that this year's money supply is 50 billion, nominal GDP is 1 trillion, and real GDP is 500 billion. a. What is the price level? What is the velocity of money? b. Suppose that velocity is constant and the economy's output of goods and services rises by 5 percent each year. What will happen to nominal GDP and the price level next year if the Bank of Canada keeps the money supply constant? c. What money supply should the Bank of Canada set next
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