If the growth rate of money is 3% and the growth rate of velocity is 1%, the growth rate ofnominal GDP is:
Question
Solution 1
The growth rate of nominal GDP can be calculated using the equation of the Quantity Theory of Money, which states that the money supply times the velocity of money equals the nominal GDP. In terms of growth rates, this can be expressed as:
Growth Rate of Nominal GDP = Growth Rate of Money Supply + Knowee AI is a powerful AI-powered study tool designed to help you to solve study problem.
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