Question: 2. Suppose that the money demand function takes the form (M / P)d : Y/(Si) a. If output grows at rate 9, at what rate

 2. Suppose that the money demand function takes the form (M

2. Suppose that the money demand function takes the form (M / P)d : Y/(Si) a. If output grows at rate 9, at what rate will the demand for real balances grow (assuming a constant nominal interest rate)? b. Use the quantity equation and the money demand function to derive an expression of the velocity of money in terms of the nominal interest rate, 7;. c. If ination and nominal interest rates are constant, at what rate, if any7 will velocity grow

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