The high school math says that this amounts 100. Or you can ask what the price change is after a change in money supply. This can be equivalent to asking the following: 2 Apt = 1 1+n where (Amtm, Amt+1 = m, ,,,,Amt+j = M,,,,,,) The answer will be filled with the blank below. What does I will give you two practical examples regarding Cagan's model. A first example: assume that a government increases money supply at a constant percentage rate per period, which means: n 1 + n Then, what would be the change in pt at each period? A second example: mt= Pt look like from t=0 to T+ 10 ? -)s-t Et Ams mt = m + ut m t < T m' t > T