Suppose the velocity of money is constant. Real GDP grows by 5% per year, the money stock grows by 14% per year, and the nominal interest rate is 11%. What is the real interest rate?
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If the velocity of money is constant. Real GDP grows by 5% every year, the money stock grows by 14% per year, and the nominal interest rate is 11%.
What is the inflation rate and what is the real interest rate ?
2. Consider money supply increase 12%, velocity of money decreases 4%, the price level increases 5%. What is the growth in real GDP ?
3. Consider the nominal interest rate is 1%, the inflation rate is 5%. What is the real interest rate ?
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