In a small economy, the level of nominal GDP is $4,000,000. The current level of money stock in the economy is $500,000. Velocity is stable, and the growth rate of real GDP is expected to be 2 percent over the next year. Money is expected to grow at 3 percent. Use this information to answer the following questions: a. What is the velocity of money circulation in this economy? b. What is the expected inflation rate in this economy?

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The Answer of In a small economy, the level of nominal GDP is $4,000,000. The current level of money stock in the economy is $500,000. Velocity is stable, and the growth rate of real GDP is expected to be 2 percent over the next year. Money is expected to grow at 3 percent. Use this information to answer the following questions: a. What is the velocity of money circulation in this economy? b. What is the expected inflation rate in this economy?

In a Small Economy, the Level of Nominal GDP Is