Question

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.

Answer 1

Answer:15%

Step-by-step explanation:

Inflation growth= Money stock Growth - Real GDP growth

=15%-6%

=9%

Nominal GDP= Real GDP+ Inflation growth

=6%+9%=15%