Why is inflation higher than money growth in high inflation countries and lower than money growth in low inflation countries?
Answer to relevant QuestionsIf velocity were constant at 2 while M2 rose from $5 trillion to $6 trillion in a single year, what would happen to nominal GDP? If real GDP rose 3 percent, what would be the level of inflation? *Suppose a central bank is trying to decide whether to target money growth. Proponents of the move are confident that the new policy would be successful as, under the existing policy regime, they observed a stable ...Explain how and why the components of aggregate expenditure depend on the real interest rate. Be sure to distinguish between the real and nominal interest rates, and explain why the distinction matters. State whether each of the following will result in a movement along or a shift in the monetary policy reaction curve and in which direction the effect will be.(a) Policymakers increase the real interest rate in response to a ...Is investment sensitive to the real interest rate? Plot since 1990 a measure of the real interest rate based on the difference between Moody’s Baa corporate rate (FRED code: BAA) and a survey of expected inflation (FRED ...
Post your question