1. If there is a long-run growth in potential real national income of 3 per cent per annum, what will be the long-run effect on prices if money supply rises by (a) 0 per cent; (b) 3 per cent; (c) 10 per cent per annum?

2. If, in the quantity theory of money, Y is growing, in what sense can it be said to be a ‘constant’?