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28 October, 13:49

In the country of Orcam, the velocity of money is constant. Real GDP grows by 6 percent per year, the money stock grows by 15 percent per year, and the nominal interest rate is 13 percent. Calculate the growth rate of nominal GDP.

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  1. 28 October, 16:39
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    Answer:15%

    Explanation:

    Inflation growth = Money stock Growth - Real GDP growth

    =15%-6%

    =9%

    Nominal GDP = Real GDP + Inflation growth

    =6%+9%=15%
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