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lidiya [134]
3 years ago
13

Please help solve: Suppose that initially the money supply is $1 trillion , the price level equals 3, the real GDP is $5 trillio

n in based-year dollars, and income velocity of money is 15. Then the money supply increases by $100 billion, while real GDP and income velocity of money remain unchanged. How do I solve using the MsV=PY formula?
Business
1 answer:
topjm [15]3 years ago
3 0
The new price level after the increase in the money supply is 3.3. Therefore, the percentage increase in the money supply is 10%. The percentage change in the price level is 10%. Percentage change in the money supply is the same as the percentage change in the price level.
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