Suppose the annual growth rate of real GDP for the nation of Svengali is 5% and the growth rate of velocity is 0%.If the money supply growth rate decreases from 6% to 2%,what was the initial rate of inflation in Svengali?

Question

Quizplus · Accepted Answer

The initial rate of inflation can be calculated using the equation: Inflation rate = Money supply growth rate + Velocity growth rate - Real GDP growth rate. Initially, it is 6% + 0% - 5% = 1%.

Suppose the Annual Growth Rate of Real GDP for the Nation