Monetary Theory
a. Under the quantity theory of money, what is the supply of
money when last year's money velocity is estimated to be 1.2, the
price level this period at $15, and this period's output at $3
trillion?
b. Suppose one period has passed since part A. The growth rate
for this period (t+1) has been found to be 5% and the inflation
rate at 2%. What must be this period's money supply, assuming
quantity theory holds?
c. Using...