Homework Answers
(32) (c)
Interest rate signals sent out by central bank has to be credible to have proper inflation control and output stabilization.
(33) (a)
As per quantity theory,
M x V = P x Y
% Change in M + % Change in V = % Change in P + % Change in Y
% Change in M + 0 = 2% + 4%
% Change in M = 6%
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