Assume that a country's money velocity remains constant and that the rate of money growth is 4 percent. a. What is the rate of spending growth? b. If there is an increase in money growth of 1.5 percent, and consumption growth is 0.5 percent, what is the new rate of spending growth? c. Given your answer in part b, what is the long-run rate of real GDP growth at an inflation rate of 4 percent?

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The Answer of Assume that a country's money velocity remains constant and that the rate of money growth is 4 percent. a. What is the rate of spending growth? b. If there is an increase in money growth of 1.5 percent, and consumption growth is 0.5 percent, what is the new rate of spending growth? c. Given your answer in part b, what is the long-run rate of real GDP growth at an inflation rate of 4 percent?

Assume That a Country's Money Velocity Remains Constant and That