In 2009, Canadian economic activity was reduced by approximately 2.5 percent. What would our money demand-money supply model predict would happen to prices if money supply and velocity would have remained constant? Did this happen in reality? (Hint: to answer this question, you will need to look for information about the inflation level in 2009.) If you have found that your prediction was not supported by data, why do you think this happened?

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The Answer of In 2009, Canadian economic activity was reduced by approximately 2.5 percent. What would our money demand-money supply model predict would happen to prices if money supply and velocity would have remained constant? Did this happen in reality? (Hint: to answer this question, you will need to look for information about the inflation level in 2009.) If you have found that your prediction was not supported by data, why do you think this happened?

In 2009, Canadian Economic Activity Was Reduced by Approximately 2