+1 862 207 3288 current rate of inflation
The average annual growth rate of real GDP for the United States is about 3%. Assume that the growth rate of velocity is 0%, and the rate of growth of the money supply is 4%.
a. What is the current rate of inflation?
b. What will happen to the inflation rate if the rate of growth of the money supply increases to 7%?
c. What will happen to the inflation rate if the rate of growth of the money supply increases to 7%, and, at the same time, the growth rate of velocity increases to 2%?
current rate of inflation
