Question: Assume: Money Supply ( M ) = 2 0 , 0 0 0 Velocity ( V ) = 4 Price Level ( P ) =

Assume: Money Supply(M)=20,000 Velocity (V)=4 Price Level (P)=2 Real GDP(Y)=40000 If the Velocity decreased to 3(Velocity decreases often with Consumers Bad Expectations of the Future) what would the money supply need to be if the Real GDP remained the same and we wanted to avoid Inflation or Deflation?

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