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ng.cengage.com ECN-351 Class Resources Student Portal I Main CENGAGE I MINDTAP Topic 7 Assignment Back to Assignment Attempts 2.5 2.5 0 Average 2.5 / 4 MindTap - Cengage Learning Q Search this course 3. Ch. 22 Problems and Applications QI Suppose that this year's money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5 trillion. A-Z The price level is 2 , and the velocity of money is Suppose that velocity is constant and the economy's output of goods and services rises by 5 percent each year. Use this information to answer the questions that follow. If the Fed keeps the money supply constant, the price level will rise by 5% v , and nominal GDP will rise by 5% v True or False: If the Fed wants to keep the price level stable instead, it should keep the money supply unchanged next year. O True O False If the Fed wants an inflation rate of 9 percent instead, it should be rewritten as the following percentage change formula: the money supply by . (Hint: The quantity equation can (Percentage Change in M) + (Percentage Change in = (Percentage Change in P) + (Percentage Change in D.) Grade It Now Save & Continue Continue without saving