Question: Consider the money demand function that takes the form M / P = kY , where M is the quantity of money, P is the

Consider the money demand function that takes the formM/P=kY, whereMis the quantity of money,Pis the price level,kis a constant, andYis real output. If the money supply is growing at a 10 percent rate, real output is growing at a 3 percent rate, andkis constant:

What is the average inflation rate in this economy?

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