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18 November, 16:37

If velocity were constant at 2 while m2 rose from $5 trillion to $6 trillion in a single year, what would happen to nominal gdp?

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  1. 18 November, 19:56
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    Money growth + velocity growth = growth of nominal GDP, so nominal GDP would rise by (6-5) / 5*100 percent + 0 percent = 20 percent. Nominal GDP growth = inflation rate + real growth
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