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6. Let real GDP growth-2.4% per year, money growth-5% per year, nominal interest rate 4.8% and velocity of money-constant. (a) Find the inflation rate, the real interest rate, and the cost of holding money. (b) What are the inflation rate, the real interest rate, and the cost of holding money if the central bank changes the money growth to 6% per year?
2. An economy produces 5 goods. The quantities produced and the prices of the 5 goods in year 1 and year 2 are shown below: Good A Good B Good C Good D Good E Year 1 Pi Q 30 100 50 200 20 300 80 100 0 100 Year 2 P2 Q2 32 100 49 210 21 295 82 110 40 95 (a) Let year 1 be the base year (i) Calculate the nominal GDP and real GDP in year 1 and year (ii) Calculate the percentage changes from year 1 to year 2 in nominal GDP and real GDP. (b) Calculate the equal-weighted diffusion index of (i real GDP in year 2 (ii) nominal GDP in year 2
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Solu-hion Given that tenest gate 4.81- mon e 4Real GDP Ntuo costof holding money → fntenest fagone on New ImCortot holding noneJ- Goal A 30 B 50 Good 20 oodSO Gooel E 40 100 3200 32 (003000 47210 rO2o 30 6coo 215 6IS 82IO 02o 3800 00 S000 4-0s 31000 → Real G DP keer-Ke 「.cs from yeA 30 loo 3000 32 (oO l 50200(ocoo Good 300 6000 215 S100 (to 95 |今800 8 2 88Oo Good 40 004000 4-0 ろ20CO Real GDP in yeosni 5Iooo Real GPP n yea 2 32006 A(2) - Dp in 米 ( 32066-31000)/ 3100이 ㅊ lob = 3、22-

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