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Given: Money supply = $275 billion Velocity of money = 20 Real GDP = $525 billion...

Given: Money supply = $275 billion Velocity of money = 20 Real GDP = $525 billion 1) Solve for the price level. 2) Solve for the nominal GDP. 3) Let real GDP be $550 billion, holding the velocity of money constant. 3.1) Solve for the new price level. 3.2) Solve for the new level of nominal GDP 3.3) The Fed wants to target a 2 percent inflation rate for the following year. Solve for the appropriate money supply to meet this target inflation rate.

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