Question

According to the Classical Quantity Theory of Money equation MV = PY, if money velocity (

  • M grows at 8% per year, what is the annual rate of inflation?
  • V increases by 3% per year, real output (
  • Y grows at 4% per year, and money supply (
A 1%
B 4%
C 7%
D 9%
E 15%
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