Answer:
grow by 5 percent
Explanation:
The quantitative theory of money (QTM) states that MV=PT (M=money supply, V=money velocity, P=price level, T=number of transactions). But normally we fin it like this: MV=PY, because the cuantitative equation assumes that the value of transactions is equal to the GDP (Y).
We want to find the equation above in terms of rate of change because the problem says money supply "grows" velocity"grows" and GDP "grows", which means we have minimum two periods of time. So, the transformed equation is: ΔM+ΔV=ΔP+ΔY.
The problem is asking for the ΔP:
ΔP=ΔM+ΔV-ΔY
ΔP= 5%+2%-2%
ΔP= 5% (It is positive, then it is growing)
Economic efficiency would not be achieved.
Answer:
24 years
Explanation:
Since Manny's savings account is yielding a 3% compound interest, he can use the rule of 72 to determine how much time it will take for his money to double:
years to double = 72 / interest rate = 72 / 3 = 24 years
The rule of 72 applies to any investment that yields compound interest.
The answer is increase liabilities